Flag-carrying airlines used to be potent symbols of a country’s pride. No more. British Airways and Spain’s Iberia are the latest of Europe’s national airlines to consider a merger. Network carriers are finding that joining forces is the only way to survive. Governments, however, must deal with the remaining obstacles to effective global airline consolidation.

The US once led the way in deregulating air travel. However, the first European Union-US “open skies” agreement, which came into force in March, showed the Europeans are now keener to open up air traffic. The deal gave US carriers the right to operate flights between EU member states – but the US denied European operators access to its domestic market. After a slow start, Europe can reasonably claim it is now the leading advocate for a freer air-travel industry.