Last year was a notable year for global airline consolidation. British Airways/Iberia finalized their merger, United/Continental closed theirs and two otherswere proposed: Southwest and AirTran in the US and LAN (Chile) and TAM (Brazil) in South America. Consolidation, in our view, represents a later stage for amature industry that is seeking ways to address its financial volatility.

Furthermore, we think there is a growing recognition that network size does matter,particularly to the most profitable revenue segments. Lastly, a gradual relaxation of rules governing airline service rights and foreign ownership restrictions ispositioning the industry for the next step: cross-border mergers. We view the proposed LAN/TAM merger as an important test case for this development.
Which names do we think are the best way for investors to participate in a consolidating global airline industry?

 It also includes an interesting seven page report on Emirates.

Global Airline Sector- Laying the Foundation for Global M&A.