Willie Walsh demanded a crackdown on state aid for struggling airlines this week, promised further restructuring at Iberia and BA and insisted some carriers in Europe should fail.

Walsh, chief executive of BA parent International Airlines Group (IAG), said the industry needs “consolidation through failure”.

Speaking at the Centre for Aviation (CAPA) conference in Amsterdam on Tuesday, Walsh hit out at the European Commission, accusing it of allowing governments to breach rules on state aid. He also slammed the UK government over its handling of visas for Chinese visitors.

Walsh said: “The EU has strict rules on state aid, but it’s weak. Its terrible governments intervene to support airlines which don’t deserve to survive.” He did not refer to Alitalia by name but appeared to have the carrier in mind when he said: “Europe would benefit from consolidation due to failure.”

He described BA sister carrier Iberia, where IAG has overseen major job losses and restructuring, as “a classic example of an airline that hadn’t faced up to structural changes in the industry”.

Walsh said: “Iberia will return to profit next year. We’re making good progress. But it won’t be profitable enough to justify investment so there will be further restructuring.” He added:

“We have to continue to transform BA, but BA will grow at about 3% a year. Iberia won’t grow unless we see structural change.”

Asked about growth to China, he said: “BA’s ambition is to serve several destinations in China. There are a lot of cities where we see opportunities if we get a [UK] visa regime that is fit for purpose.

“The UK attitude to China is old fashioned. The government prioritises trade with China but makes it so difficult to visit Britain from China … There is much more freedom at the Chinese end [of the route] than ours.”