Delboy, I'm not suggesting the EU is perfect, but I really hope you're wrong on how it will react... I see the Swissair collapse as the straw that broke the camel's back on EU subsidies for hopeless airlines. Let them consolidate. The US services its 260m citizens with just over a handful of major airlines... we on the other hand believe any EU member with over 10m people deserves its own heavily loss-making international airline. I can list a whole bunch of flag carriers which would be consolidated out of existence very rapidly given their performance and the limited size of their domestic markets:
Swissair (Switzerland: population 7.2m)
Sabena (Belgium: population 10.2m)
Aer Lingus (Ireland: population 3.8m)
Austrian (Austria: population 8.2m)
KLM (Netherlands: population 16.0m)
TAP (Portugal: population 10.1m)
SAS (Sweden 8.9m; Denmark 5.4m; Norway 4.5m)
It's interesting that you have to aggregate the populations of Switzerland, Austria, Ireland, the Netherlands, Portugal and Norway before you get to 60m, the population of the UK. And that, friends, is one reason why the UK can genuinely support an international airline (or two!)