Weaker airlines set to feel the pinch in Europe's overcrowded market: CEOs

An increasingly competitive European airline market could soon bring consolidation and possibly European low-cost carriers providing local connecting services or "feeder" flights for full-service long-haul airlines, the CEOs of easyJet and IAG said Thursday. Low fuel prices have led to a big growth in capacity on European routes, putting market expansion at a 10-year high on forecasts that airlines will add new capacity of 8% over the next six months. But inevitably increased competition is causing fares to drop, good news for consumers but bad news for the profit margins of airlines. Carolyn McCall, the CE of low-cost airline easyJet said she expected more consolidation over the next 12 to 18 months, with weaker airlines suffering in the tougher trading conditions, as the previous boost to margins from lower fuel prices is competed away. Willie Walsh, the CE of British Airways-owner IAG, said IAG was not currently actively considering any acquisition deals. "I think there are airlines out there that would like to be consolidated into a larger group, I get calls from a lot of them," said Walsh.<br/>