European airline chiefs have appealed to the European Commission for speedier approval of airline acquisitions to allow aviation market consolidation.
Luis Gallego, chief executive of British Airways and Iberia parent IAG, suggested: “If we don’t allow consolidation, we will destroy aviation in Europe.”
Speaking at the Airlines for Europe (A4E) Summit in Brussels, Gallego argued: “We need consolidation in Europe to compete in a global world.”
IAG is pursuing a €400-million takeover of Spanish carrier Air Europa having launched a revised bid last year after withdrawing an earlier €1 billion bid. The EC has signalled it sees significant obstacles to signing off the deal.
Ryanair Group chief executive Michael O’Leary argued “consolidation is important for the future of Europe”, despite insisting: “I’m not involved in M&A.” He noted Ryanair had repeated attempts to acquire Aer Lingus blocked by the Commission before the Irish carrier was bought by IAG.
Yet he suggested: “Swiss and Austrian Airlines have much better futures because they were acquired by Lufthansa.”
Lufthansa Group chief executive Carsten Spohr, agreed, adding: “Brussels Airlines would not exist without it being bought by Lufthansa.”
He said he had told the Belgian prime minister: “You would lose connectivity [at Brussels].”
The EC issued a statement of objections to Lufthansa Group’s proposed acquisition of Italian carrier ITA from the Italian government on March 25.
The deal, announced in May last year, would see Lufthansa acquire 41% of ITA initially with an option to complete a full takeover later.
The EC has identified concerns that the deal would reduce competition on routes between Italy and Central Europe, and between Italy and the US, Canada and Japan, while also strengthening ITA’s dominant position at Milan-Linate airport.
Lufthansa, ITA and the Italian government have until April 26 to propose remedies.
Air France-KLM is in the process of acquiring a stake in SAS Scandinavian Airlines alongside US private equity group Castlelake, and a controlling stake in TAP Air Portugal is up for sale.
O’Leary said: “Unless we tidy up some of these small-scale carriers in Europe we’ll never get to a competitive market.” He urged the EC: “Get on with it and approve consolidation.”