Brussels (Brussels Morning) Alexandre de Juniac, head of the International Air Transport Association (IATA) industry trade group, predicted that large-scale government interventions could delay consolidation of the sector by as much as five years, Reuters reported on Wednesday.
Although IATA is calling for additional subsidies to help the sector, de Juniac acknowledged that “governments have taken big stakes in many of their national airlines, so it will be difficult for them to sell this asset to any foreign actor and explain that to the taxpayer”.
Accordingly, such interventions “will be a factor that will prevent consolidation in the coming three to five years”, he said.
EU regulations prevent bailout recipients, such as Germany’s Lufthansa and the Franco-Dutch Air France-KLM Group, from making acquisitions before repaying bailouts.
IATA seeks more taxpayer support
De Juniac, with one month to go at the helm of IATA, called on governments to provide route and air ticket subsidies on top of the US$ 225 billion already provided to the sector. His successor, Willie Walsh, the former head of the International Consolidated Airlines Group, takes over in April.
Citing Australia’s plan to provide subsidies totalling US$ 925 million in order to revive travel, de Juniac urged other governments to “consider stimulus measures.”
T&E opposes IATA approach
Taking a markedly different approach, Andrew Murphy, director at the European Federation for Transport and Environment (T&E) NGO, argues that “public funds should be channelled into developing cleaner fuels and new plane designs, not subsidising what’s still the most carbon-intensive form of travel.”
He maintains that the industry must adapt to “the new normal,” which will include less flying, “especially on the corporate level.”
According to internal communications, IATA began preparations to lobby for subsidies last year, not long after the coronavirus pandemic broke out. It now hopes that most borders will have reopened by October, which is when its annual meeting is to take place in Boston, some four months later than originally planned.