DUBAI (Reuters) – The head of global airline body IATA expects the industry to emerge from the coronavirus crisis smaller and more cautious, doubting airlines will try to expand through acquisitions.
The airline industry has been crippled by the pandemic, which continues to leave many aircraft around the world grounded or flying near-empty as demand limps towards a recovery.
“It will be a smaller industry. We are not going to recover all the capacity,” International Air Transport Association (IATA) Director General Willie Walsh said in a pre-recorded online interview broadcast on Monday. He cited the swathes of aircraft retired and employees laid off or placed on furlough.
“It will be a more cautious industry. I don’t expect to see M&A (mergers and acquisitions) activity, principally because people will be guarded about the cash they have.”
Walsh, the former chief executive of British Airways-owner IAG, said spending “valuable cash resources” would be “too risky” but he believed there would be consolidation through airlines shrinking their operations and some failing.
“It’s going to take airlines time to repair their balance sheets.”
IATA has forecast global travel demand to return to 2019, pre-pandemic levels in 2024.
(Reporting by Alexander Cornwell; Editing by Mark Heinrich)