EasyJet chief sees consolidation through retrenchments not mergers

EasyJet CE Johan Lundgren believes consolidation in Europe is more likely to happen through legacy carrier retrenchments rather than merger and acquisition (M&A) activity, in part because of state support keeping failing carriers in operation. Asked about likely consolidation within Europe during the airline’s full-year results on 29 November, Lundgren played down likely activity. “I always said that I don’t believe M&A consolidation will happen to the extent perhaps that some people think, partly because of the structure of European airlines,” he said. “There are a number of… companies that should have gone bust, but have been supported by their respective gove rnments, so it is not clear there is a normal market rationale.” Italy is continuing its efforts to secure a buyer for ITA Airways, with Air France-KLM and Lufthansa among the interested parties. The former has also said it would be interested in looking at TAP Air Portugal, sale plans for which the Portuguese state is working on, while IAG is continuing its on-off pursuit of Air Europa having taken an initial 20% stake. EasyJet last year itself rejected a takeover approach, reportedly from budget rival Wizz Air; whilst recent comments from IAG chief executive Luis Gallego around consolidation prompted media speculation over potential interest in carriers including EasyJet. <br/>