Ryanair could suffer in Easyjet and Go merger

British Airways says consolidation of low-cost airlines is inevitable after rivals easyJet and Go announced they were in takeover talks.

Luton-based easyJet is seeking to buy Go as part of its plans to expand in the European short-haul market.

Any merger of the two companies could create serious problems for low-cost rivals such as Ryanair and Buzz.

EasyJet admitted the negotiations were at an "advanced stage" in an announcement which came just two weeks after Stelios Haji-Ioannou, the airline's founder and chairman, announced he was quitting.

British Airways, which set up Go in 1998 before selling it last June, said it was "not surprised" by the move.

Spokesman Iain Burns said: "Given that we have six no-frills carriers in the UK, it was inevitable and entirely rational that sooner or later there would be consolidation."

He said BA was more used than any other airline to fighting competition and pledged the company would respond in June with the launch of cheaper fares to a series of European destinations.

A spokeswoman for Buzz said: "As nothing has yet been confirmed, we will continue to watch with interest but will not be drawn into speculation at this stage."

The low-fare carriers have generally bucked the downward trend aviation has experienced since September 11. Many business executives now shun the major airlines and favour the no-frills operators.