CEOs of European airlines stress importance of industry consolidation, Reuters reports

CEOs of European airlines stress importance of industry consolidation, Reuters reports

© Reuters. A British Airways passenger plane lands at London Heathrow Airport, in London, Britain May 21, 2020. REUTERS/Toby Melville/File Photo

By Joanna Plucinska, Julia Payne and Kate Abnett

BRUSSELS (Reuters) – Europe’s airline sector needs to consolidate further to remain competitive, the CEOs of British Airways owner IAG and Ryanair said on Wednesday, as the EU considers a new deal between Germany’s Lufthansa and its Italian rival ITA Airways.

“If we don’t allow consolidation in Europe, we will destroy the airlines in Europe,” IAG CEO Luis Gallego told an aviation conference.

Ryanair CEO Michael O’Leary said at the same event that there was a need to “bring order” to Europe’s struggling smaller carriers, stressing that Portugal’s TAP needed an amount “unsustainable” taxpayer support to survive during the pandemic.

The European Commission should “go ahead and approve these mergers because, ultimately, that’s the way forward in Europe,” O’Leary said.

The European Commission is due this week to give its opinion on Lufthansa’s offer to acquire a 41% stake in state-owned ITA for 325 million euros ($352 million).

Lufthansa’s CEO said he wanted to close the deal “as soon as possible” and was optimistic ahead of the EU’s expected statement of objections.

EU antitrust regulators opened an investigation into the potential deal in January, with warnings that it could reduce competition on flights to and from Italy. Potential solutions could include opening slots, traffic rights and aircraft to allow a rival to operate on certain routes.

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