European major airlines’ strategic reactions to the Third Package

Since the Third Package in 1993, European Union (EU) registered airlines have been able to purchase majority ownership of other EU carriers and set up airlines in other EU countries. This paper investigates how European majors have responded to the liberalised policy, especially European Commission Regulation 2407/92. It goes on to analyse the impact of these strategies for airlines and the EU-US relationship in terms of airline alliances. It concludes that British Airways and the SAirGroup have pursued a policy of acquiring airlines in EU countries, with the former finding it an expensive and questionable strategy, and the latter disastrous.