Bachelor’s Thesis Airline Consolidation in Europe Small European Airlines’ Chances of Survival Amid Industry Consolidation, and the Proactive M&A Auction as a Strategic Way Forward ZHAW Zurich University of Applied Sciences School of Management and Law International Management David L. Egli Matriculation Number: 15540339 Talwiesentrasse 22, 8404 Winterthur
[email protected] Submitted to Dr. Markus Braun Winterthur, 24 May 2018 Management Summary The European airline industry is experiencing a trend towards consolidation, and many carriers are contesting in a highly competitive environment. From 2011 – 2015, the number of scheduled airlines operating within Europe declined by over 70, and the growing influence of large players such as the Lufthansa Group or the IAG Holding challenges small airlines in their economic viability. Consequently, small firms must find new strategic solutions to secure their continuing existence. The aim of this study was to clarify the chances of survival for small airlines, and if selling the company proactively through an M&A auction could be a beneficial solution to the consolidation trend. Therein, the focus lies in maximizing the transaction price and ensuring the continuity of the brand. Additionally, the study intended to identify key criteria and stumbling blocks for small airlines considering to follow such a strategy. To facilitate the understanding of airline consolidation, this study introduced the differences between the US and the European markets. Literature review and expert interviews were used to conduct a trend and market analysis. To reveal key strengths, the collected data also served in the evaluation of other strategic tools such as the SWOT and value chain analysis.