Aer Lingus must consider merger, says former chief

THE future of Aer Lingus as an independent carrier is not secure and the company needs to consider merging with one or more airlines, its former chief executive has warned.

Chief executive of British Airways Willie Walsh was speaking at the University of Limerick, where he delivered a lecture at the Kemmy Business School entitled A Sustainable Future for Aviation.

The former chief executive of Aer Lingus admits he did argue in the past that Aer Lingus had a future as a stand-alone airline but says the global aviation industry has changed since then and is now facing record losses.

“I think things have changed since then and given what’s happened to the economy here and given the way Aer Lingus has struggled in recent times, I think you could now make an argument that its future as an independent carrier is not that secure and maybe Aer Lingus does need to look at a relationship with some other carrier or a number of other carriers,” he said.

According to Mr Walsh, the airline industry is facing its biggest-ever crisis and significant structural change is one of the only ways that airlines can make it through the current downturn.

He believes that consolidation within the industry’s 500 major airlines is necessary, and while it won’t solve the problem “it is part of the solution”.

“I don’t think you need 500 competitors in order to have a competitive environment for consumers. I think the industry is overly fragmented and would benefit from some consolidation. There are some restrictions in place still around ownership and control and there’s political influence that makes it difficult but I think ultimately we will see a reshaping of the industry because I don’t think all of the airlines operating today will be able to survive through this,” he said.

“I think you could make a strong case now that Aer Lingus might be in a better position if it was part of an alliance or part of a grouping with some other airlines.”

He said British Airways had no immediate plans to operate any direct services from Ireland.

However, he didn’t rule out the possibility of more transatlantic flights stopping at Shannon to avail of the US customs and immigration pre-clearance facility.