Summary
Air France-KLM interest in CSA is just another step in the tendency to integrate more airlines and consolidate capacity. This will mean fewer independent airlines, less seats available, less competition and higher prices for tickets and cargo space.
Analysis
In times when it is evident that there is an excess in capacity at the world's airlines, a condition that is putting even more pressure on the finances of the industry, no body should be surprised to see more consolidation in the airline markets. Flag carriers such as CSA offer very attractive opportunities for larger airlines like Air France-KLM to control important domestic markets, such as the Czech's with its increasing high yield tourism and industry related traffic. Consolidation by aquisition of former flag carriers by foreign investors is now more possible due to a relaxation of investing limitations and the existence of pan-national entities such as the European Union. I forsee this phenomenon to go beyond European skies and include flag carriers in Asia, Africa and Latin America as well.
