European airline CEOs say industry consolidation vital

Airline executives called for further industry consolidation on Wednesday as the EU weighs a deal between Germany's Lufthansa and Italy's ITA Airways and continues to block a separate transaction between IAG and Air Europa. Europe's airline industry has been gradually consolidating for the last 20 years but remains fragmented, with small national carriers struggling to compete with bigger rivals, often needing expensive government bailouts. The EC should "get on with it and approve these mergers because, ultimately, it is the way forward in Europe," Ryanair CEO Michael O'Leary said at an industry event in Brussels. He added there was a need to "tidy up" small-scale, struggling carriers in Europe, pointing to Portugal's TAP as requiring an "unsustainable" amount of taxpayer support to survive during the pandemic. Others highlighted that smaller airlines have a much greater chance of success as part of larger groups, such as Air France-KLM (AIRF.PA), opens new tab, IAG and Lufthansa. "If we don't allow consolidation in Europe, we will destroy airlines in Europe," IAG CEO Luis Gallego told the conference. The EC is due to say this week how it views Lufthansa's bid to acquire a 41% stake in state-owned ITA for E325m while offering up a statement of objections to the deal.<br/>