Walsh supportive of Ryanair bid for Aer Lingus

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IAG chief executive Willie Walsh "personally" supported Ryanair's takeover bid for its fellow Irish carrier Aer Lingus on the grounds that the acquisition would have made the market more competitive.

During the Future of Air Transport conference in London on 25 November, Walsh – who was chief executive of Aer Lingus before joining British Airways – said it is a "nonsense to have two domestic competing airlines in a market the size of Ireland" .

The EU rejected Ryanair's third takeover bid for the Irish flag carrier in February 2013, on competition grounds.

"It’s just nonsense to think that this is a major competition issue and so, personally, on a principled basis, I very much supported Ryanair’s acquisition of Aer Lingus because I think it needs to pursue further consolidation," Walsh says.

He adds that the European Commission’s "fixation" on maintaining multiple European players in the market is "absolutely wrong" because it loses sight of Europe’s need to compete effectively with international rivals.

The IAG chief was speaking on the topic of the prospects for further airline consolidation in Europe.

Using a chart showing airline capacity in Europe and the USA, Walsh said that the European market remains "fragmented", with the top five biggest airlines controlling 58% of the market based on available seat-kilometres, while 78% is controlled by the top five US airlines.

"I do not think Europe will see the same level of consolidation as we have seen in the US," says Walsh. "Some of that is for structural reasons, some of it for competitive policy reasons, and some of that is just by virtue that we continue to see in Europe failing airlines that should be going out of business but are being kept alive by unnecessary and in many cases illegal state aid."