Spanair Collapse Puts Europe’s ‘Zombie’ Airlines on Alert

Spanair SA’s collapse after the withdrawal of state funding suggests Europe’s debt crisis may spur airlines from the Mediterranean to the Baltic to consider mergers or risk failure.

The first collapse of a scheduled European airline since the last recession comes as cash-strapped governments mull disposing of at least half a dozen other carriers in auctions pitting Qatar Airways Ltd., which had been in talks with Spanair, and other emerging-market bidders against Air France-KLM Group, Deutsche Lufthansa AG and British Airways parent IAG.