Not long ago Air France took over the Dutch airliner KLM. Currently Iberia is on focus by British Airways but also by Air France KLM, as rumors go.

Companies merge because so they can achieve more growth and a higher profitability.

Growth as a criteria for merger is quite straightforward. In case of KLM Air France, there are just more flight options to offer for clients which is the best basis for supporting a future expansion.

But mergers are also about costs. In case of the airline industry, costs are quite simple: buying and leasing airplanes. And this is also very simple, because for European candidates there are only two options: Airbus and Boeing.

The Fleet of KLM is mainly supported by Boeing airplanes.
Air France’s fleet is more Airbus oriented, but there are many (larger) Boeing planes.

Iberia, the Spanish airliner, has mainly Airbus planes, this must be because of the consortium Spain as well as France are in.

What will happen to this fleet architecture?

Advantages of a single airplane manufacturer are most of all cost efficiency and negotiation power. Also the focus on a single airplane will concentrate knowledge and knowledge management will be more simple (for example the learning cost to manage and operate a plane types versus more plane types).

There are also disadvantages. Not all planes between either airplane manufacturer are really similar and therefore replaceable. There is a status (and style) difference (Made in the US versus Made in the EU).

Bargaining power is also a disadvantage because of increased dependency on a single partner. There is no longer a trade-off. Flexibility is another disadvantage: a single provider will be less flexible.

And then there is a political component. A political lobby could favor European companies to use Airbus. Much depends on the success of airbus and on the success of the EU itself.