The international airline sector lost $5bn last year and the industry's association IATA expects it will lose at least $2.5bn this year. This, together with the global economic downturn, coupled to the decline in air travel, is prompting a new round of consolidation in European skies.

Europe's three biggest airlines - Air France-KLM, Lufthansa and British Airways - are not only vying for supremacy but scrambling to expand into some of the continent's largest aviation markets such as Italy, Spain and Scandinavia. Italy, Europe's fourth-largest market, is likely to be the first to succumb to the new consolidation mania. CAI, the group of Italian investors that recently bought Alitalia, is due to pick the airline's new international partner in coming days before officially relaunching the Italian flag carrier next week.