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While there are many salient aspects of the upcoming "Open Skies" trans-Atlantic aviation agreement airline investors should be looking at, much of the accord's ado centers around the freeing up of London's Heathrow airport, by far the busiest Euro-American hub. Barron's notes that besides the obvious opportunity for U.S. carriers to explore new markets, European airline skirmishes are likely to ignite a new round of airline mergers, which could in turn bolster U.S. consolidation.

While it's unlikely new airlines will immediately take a huge bite out of Heathrow incumbents British Airways (OTC:BAIRY), AMR (AMR) and United (UAUA), due to its operating at near-99% capacity, possible Heathrow expansion initiatives and open European skies could provide an attractive growth opportunity for discount airlines like Ryanair (RYAAY) and number-one U.S. discounter Southwest (LUV), as well as Continental (CAL), Delta (DLA) and US Airways (LCC). British Airways' exclusive Terminal 5 opens in March, which one analyst says will more-than counteract any loss of business to new competitors. United losses could also be offset by its buyout potential, which could see shares ($40) go for as much as $90. AMR has no serious counter-measure, and shares, down from $40 to $21 YTD could be headed lower. Northwest (NWA, $18), a likely seller, could also hit $30.

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Source: Open Skies: Winners and Losers - Barron's