LISBON Reuters -- Europe was entering an inevitable post-pandemic period of airline consolidation, as legacy flag-carriers struggled to navigate through a competitive landscape, the chief executive of low-cost carrier Ryanair said on Wednesday.
Michael O'Leary told Reuters on the sidelines of a news conference in Portugal's capital Lisbon that we are entering a four or five-year period of consolidation.
Many of Europe's legacy airlines are finding it hard to compete with budget airlines, hampered by weak balance sheets that could be made more robust by merging with rivals, analysts said.
The German airline Lufthansa offered to buy a minority stake in ITA Airways, a loss-making successor of Italy's Alitalia, last month, saying that the southern European country was a prominent market both for business travellers and tourists.
Lufthansa's bid has ignited speculation of further sector consolidation as the industry seeks to make a more profitable recovery after the easing of pandemic restrictions.
The Portuguese government, which owns TAP airline, has said it is considering an outright or partial sale of the business. According to analysts, Lufthansa, Air France-KLM and British Airways owner IAG are potential buyers.
The Portuguese and Italian governments should get a commitment from potential buyers that they would grow the airlines' traffic by 50% over a five-year period, O'Leary said.
It's inevitable that AliItalia will be bought, and TAP will be bought, O'Leary said. I think it is likely that EasyJet and Wizz Air will be taken out by the legacy carriers in the next couple of years. O'Leary believes that the sector in Europe will move towards having four large airlines: Lufthansa, Air France-KLM, IAG and Ryanair.