When OAO Aeroflot announced a bid for Alitalia, it could have been an April Fool's joke that came a ...
When OAO Aeroflot announced a bid for Alitalia, it could have been an April Fool's joke that came a day too late, like many of the planes operated by both airlines.
It turns out that Russia's largest carrier is serious about joining UniCredit in taking control of the Italian airline that remains one of the biggest in Europe.
Suddenly, Europe's transport industry is buzzing with deals. The region's traditional network of flag carriers has already been ripped up by the budget airlines. Now it looks like it is being blown apart by a new wave of owners - and this time they are most likely to be financial buyers.
That is to be welcomed. The old system was overstaffed and inefficient. It created routes based on borders and national pride. Few companies made money, and many lost billions. Europe needs an efficient airline industry - and the new arrivals are more likely to provide it.
It might be only a matter of time before British Airways, Air France-KLM Group and Deutsche Lufthansa become the targets of a private equity firm or a buyer from outside the cozy cartel that has dominated European aviation for 50 years.
Bids in the industry are stacking up faster than the planes waiting for a takeoff slot on a windy day at Heathrow Airport.
It's not hard to see an evolutionary process at work. Over a period of years, the shake-up of Europe's airline industry has been moving steadily up the food chain. The plankton went first. Now the medium-sized players are being dealt with. The dinosaurs are probably next.
In the past decade, flag carriers such as Belgium's Sabena have disappeared into bankruptcy. The once-mighty Swissair has been replaced by the much humbler Swiss International Air Lines, which is in the process of being swallowed by Lufthansa. KLM Royal Dutch Airlines has been gobbled up by Air France.
Now Alitalia and Iberia may join that list. The Italian airline has been in and out of intensive care for years, and still manages to struggle on. Yet Italy remains a market the European aviation industry cannot ignore. In many ways, the resurrected Aeroflot would make a natural partner.
Iberia, in which British Airways has a 10% stake, has better prospects. It had a loss of E9.46m in the fourth quarter, yet that is in-flight peanuts by airline standards. For a private-equity firm, it represents an opportunity - Spain is among Europe's fastest-growing economies, and remains one of its most-popular tourist destinations.
The immediate trigger for airlines' rising stock prices and takeover speculation is the latest open skies agreement between the US and the EU. That will allow an EU-based airline to fly from any EU airport to the US - not just from the airports of their own country.
Until recently, it looked as if the major traditional European airlines - Air France, British Airways and Lufthansa - would lead the consolidation of the industry. As it liberalised, they would gobble up the smaller, peripheral carriers until the continent was dominated by a handful of mega-companies.
The new budget airlines such as Ryanair, EasyJet and Air Berlin continue their unstoppable rise in Europe. Ryanair's market value is now almost as big as Lufthansa's. Meanwhile, it will be the private equity firms such as Texas Pacific that lead the restructuring of the old flag carriers.
Europe's big airlines are natural targets for buyout firms awash with cash. Airlines generate lots of money, they have assets you can borrow against, and there is plenty of room for cost-cutting.
Air France is probably safe - The French are too proud to allow a bid for the national airline. Yet if Alitalia and Iberia can be taken over by bankers or private equity firms, then British Airways and Lufthansa may be next.
Matthew Lynn is a Bloomberg columnist