International Consolidated Airlines Group (IAG), the parent company of British Airways and Iberia, is seeking a short-haul carrier to add to its portfolio. It's becoming apparent that airlines can't be all things to all types of flyers, though they have certainly tried. Now it may be time to acquire the missing pieces.

IAG Chief Executive Willie Walsh sees more airline mergers in the future and further consolidation within his airline group could mean the pursuit of a discount carrier. Walsh indicates that current IAG airlines British Airways and Iberia could benefit from feeder traffic into the airlines' major long-haul hubs.

The most familiar relationship among airlines of different sizes has been the traditional code-share in which airlines complement their routes and services by selling seats and placing their airline codes on partner airlines' flights. Typically, these agreements afford the larger carriers additional traffic that feeds into their most profitable flights. The larger carriers can then save the costs of having to branch out into smaller communities. In the case of IAG, this feeder traffic relationship will likely exist in similar fashion, only this time the parent company intends to own the participating airlines.

Meanwhile, La Tribune reports that Air France-KLM is looking to restructure its business model to make it easier to acquire airlines and enhance their existing agreements and joint ventures. Think about this. Lufthansa AG, part of the Star Alliance, has holdings in at least 14 passenger airlines. If IAG (currently British Airways and Iberia) succeeds in its quest to add a short-haul carrier, you can include Oneworld as another alliance with at least one short-haul member airline. In order to compete, Air France-KLM, a member of SkyTeam, wants to position itself for the addition of a mix of airlines. They already own 25 percent of Alitalia and have a joint venture pact with Delta Air Lines in the U.S.

The airline consolidation that was born out of necessity during the recent economic downturn has evolved into the modus operandi for an industry that is benefitting from a favorable regulatory climate. The talk of dire consequences for struggling airlines unable to coordinate resources has likely played a part in a more relaxed attitude by lawmakers toward mergers and joint ventures. Airlines often use bad times to catch breaks along the way to better times.

It was not too long ago when we were considering the introduction of low-cost airlines into the big airline alliances as something unlikely or at least rare. Recent trends point toward a different conclusion. The three airline alliances are likely to each have at least one budget and/or short-haul carrier, through invitation or outright acquisition.

Through consolidation, airlines are realizing the benefits of sharing resources and adding routes and services without adding overhead costs. This is always a good thing on paper and scores points with regulators who, like most of us, like a robust and vibrant airline industry. However, the question that most airline passengers have is: When will airlines breach the point of regulatory tolerance? Will it be when we're back to a world of less airline competition and higher fares? It remains to be seen if these alliances will act as a group of individual airlines that happen to complement a larger picture, or three unstoppable giants that will not only consolidate services and routes, but market dominance as well.