The European air transport industry is headed toward a further step in its slow process of consolidation, as International Airlines Group (IAG) is nearing a takeover of Aer Lingus. IAG has joined the European consolidation process late in the game, following the establishment of Air France-KLM in 2004 and Lufthansa's investment in Swiss International Air Lines in 2005. But of late, IAG has driven mergers more than any other European carrier: The group was created as a result of the British Airways-Iberia merger in 2011. Later, BMI British Midland and Vueling (in which Iberia was a large shareholder) were added to the portfolio. Unlike Air France-KLM and Lufthansa, IAG has largely completed deep restructuring efforts at both BA and Iberia, and has therefore enjoyed much better profitability. The group is targeting operating margins well in excess of 10% over the coming years.
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