IAG CEO Sees Growth Opportunities in Demise of European Airlines

   By Robert Wall 
 

LONDON--IAG SA (IAG.LN) is eyeing some of Monarch Airlines' (MA.YY) slots at London's Gatwick Airport and may order more Airbus SE (AIR.FR) planes for its units, said chief executive Willie Walsh on Friday, adding that the bankruptcies of Monarch and Air Berlin (AB1.XE) could provide growth opportunities for European carriers.

The demise of European airlines is reducing the number of seats for sale in the short term and could change the competitive landscape in parts of Europe in the longer term, Mr. Walsh told reporters. It could also help airlines wield greater control over ticket pricing, he added.

Monarch ceased flying last week after running out of money, while Air Berlin on Thursday sold the bulk of its business to Deutsche Lufthansa AG (LHA.XE) after declaring bankruptcy in August. Bids are due next week for Alitalia (ALITALIA.YY), which went bust in May.

Mr. Walsh, whose company bid for parts of Air Berlin, also said that the effective takeover of Germany's second-largest carrier by its No. 1 airline raised "significant competition issues."

International Consolidated Airlines Group--as IAG is formally known--would be positive in the July-to-December period; that outlook hasn't changed, he said.

IAG also sees growth opportunity elsewhere.

Aer Lingus is looking to add more Airbus A321LR narrowbodies that can be used on trans-Atlantic hops and may have scope to add more Airbus A330 long-haul planes, Mr. Walsh said.

Aer Lingus "could expand faster than their current plan," said Mr. Walsh, who once ran the Irish airline.

Mr. Walsh said IAG is also looking to expand budget long-haul unit Level from its current two-plane capacity to up to 30 by 2022.

Level, which began flying this year, will also set up operations beyond its Barcelona base, though the location hasn't been set yet.

Mr. Walsh said Level could provide IAG with a gateway to price-sensitive secondary cities in China, where a lack of demand for business-class seats has made it more difficult for British Airways to make money.

Mr. Walsh said that in addition to the Airbus A330s flown by Level, the carrier also could add the A321LR planes that Aer Lingus flies.

Those A321LR planes--single-aisle aircraft configured for longer ranges--could also be operated by British Airways and Spanish unit Iberia, he said.

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

October 13, 2017 07:23 ET (11:23 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.