European airline leaders have recently expressed that the aviation industry needs to increase its profitability and may need to further consolidate to finance sustainability goals. This trend is likely to result in higher ticket prices for passengers, in addition to the growing demand for air travel.
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The CEO of IAG, the parent company of British Airways, stated that there is over a 90% chance that the industry will not be able to meet the European Union's mandate for sustainable aviation fuel (SAF) availability by 2025. The EU has implemented regulations requiring flights departing from EU airports to carry an increasing percentage of SAF, starting with 2% of total fuel in 2025.
The CEO argued that Europe's stricter regulations, compared to other regions, could make its already fragmented industry less competitive, pushing airlines to continue recent trends of forming partnerships. He suggested that the industry needs to consolidate to afford sustainability ambitions and remain competitive.
Ryanair's CEO, Michael O'Leary predicted more consolidation in the industry, with IAG potentially acquiring Portugal's TAP airline. He also speculated that low-cost competitors Wizz Air and easyJet could be targets for consolidation, with potential buyers including IAG, Air France-KLM, Lufthansa, or a Middle Eastern buyer. These comments were met with a cool response from easyJet. A spokesperson for the airline stated that there is no realistic prospect of Ryanair becoming the only low-cost airline in Europe.
