Consolidation in the Airlines Industry Reducing Airports Negotiation Power

by Sameer Joshi or 01-Jun-2018

 Accepting Low-Cost Airlines and Expanding into Asia will Restore Power Balance Dynamics

A series of airlines have announced large financial losses or outright bankruptcy in recent years. In the latter category were included companies such as Alitalia, Monarch Airlines and Air Berlin which all defaulted in 2017. Mergers and acquisitions have also intensified with Lufthansa acquiring majority shares in Brussels Airlines in 2016. The falling number of airlines especially in the European and North American industries is tilting the power balance between airports and airlines in the favor of airlines.

Key Questions Answered:

Why is consolidation occurring in the airlines industry?

How is this impacting the airport industry?

How can the airport industry respond and restore power balance with the airlines industry?


Airports in the US are even more reliant on airlines with the top four players possessing an 84% market share in the US airlines industry. However all is not doom and gloom for airports.

According to Publisher analyst Mohammad Hamza Iqbal

“Airports can restore the balance between themselves and airlines by intensifying the movement towards welcoming low-cost airlines and diversifying their operations. “Hundreds of new airports are or will be built in countries across Asia in the coming decade meaning European airport groups can utilize this opportunity by providing their expertise in return for increased revenue diversification.”

 Already the likes of Fraport and Groupe ADP have established a small presence in the region. MarketLine's latest report explores this in detail.