Interventions could set airline consolidation back by five years

Interventions could set airline consolidation back by five years

Brussels (Brussels Morning) Alexandre de Juniac, head of the International Air Transport Association (IATA) industry trade group, predicted that large-scale government interventions could delay consolidation of the sector by as much as five years, Reuters reported on Wednesday.

Although IATA is calling for additional subsidies to help the sector, de Juniac acknowledged that “governments have taken big stakes in many of their national airlines, so it will be difficult for them to sell this asset to any foreign actor and explain that to the taxpayer”.

Accordingly, such interventions “will be a factor that will prevent consolidation in the coming three to five years”, he said.

EU regulations prevent bailout recipients, such as Germany’s Lufthansa and the Franco-Dutch Air France-KLM Group, from making acquisitions before repaying bailouts.

IATA seeks more taxpayer support

De Juniac, with one month to go at the helm of IATA, called on governments to provide route and air ticket subsidies on top of the US$ 225 billion already provided to the sector. His successor, Willie Walsh, the former head of the International Consolidated Airlines Group, takes over in April.

Citing Australia’s plan to provide subsidies totalling US$ 925 million in order to revive travel, de Juniac urged other governments to “consider stimulus measures.”