British Airways owner IAG’s boss sees consolidation ahead as business travel struggles to recover

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British Airways owner IAG (LON:IAG) said is hopeful that a corridor between the UK and US will be open by the end of June.Luis

Gallego, IAG’s chief executive, said the US should be on the UK’s green list of countries due to its high rate of vaccinations.

Even then, Gallego does not expect business travel to recover quickly to pre-pandemic levels, with sees passenger numbers 15% below levels before the virus in 2023/24 when airlines expect other parts of air travel to be back at 2019 levels.

Business travel is a major earner for the flag carriers such as IAG’s British Airways and Iberia, with the transatlantic routes especially lucrative.

Speaking to an online travel webinar, Gallego added that the squeeze on international travel is likely to lead to more consolidation within the sector with between two and three dominant carriers on each continent.

IAG would play a part in this, he added, as some of the weaker airlines will not survive given the huge amount of debt the industry has taken on to get through the pandemic.

“Some won’t survive: there will be opportunities for consolidation we’ll participate in,” Gallego told the webinar.

IAG’s rivals meanwhile again called for an overhaul of the UK government’s traffic light system, saying that “can’t go through another ruined summer”.

Bosses from easyJet, Jet2, Tui, Loganair and Manchester Airports Group (MAG) wrote to the prime minister yesterday to repeat their view that the government is being too cautious with its flight resumption programme.

Johan Lundgren, EasyJet’s CEO, said: “All the data supports the fact that much of Europe could be opened up to safe travel.

It is counterintuitive, given the success of the vaccination programme, that the UK has the most-restrictive system.”

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