Airline industry will be 'smaller but more efficient' - former British Airways boss

IAG owns numerous airlines and travel brands, including British Airways.
IAG owns numerous airlines and travel brands, including British Airways. Photo credit: Getty.

The airline industry is never going to get back to the way it was before coronavirus, warned the former chief executive of British Airways-owner IAG (International Airlines Group), adding it will be smaller but more efficient in the future.

"It's never going to get back to the way it was," Willie Walsh said in an online interview with Eurocontrol, Europe's organisation for the safety of air navigation.

Walsh retired as IAG CEO earlier this month.

Looking five years ahead, Walsh forecast it would be a smaller industry and there would be fewer players. Most of the consolidation would initially come through failures, he said, as he also predicted COVID-19 would make airlines more resilient.

"Most airlines are restructuring in a very positive way: they're going to be more efficient and the cost base will be more variable, they'll be able to respond to crises going forward," he said.

Looking at the next few months though, he said it would be "very, very tough". Flight data shows that a hoped-for recovery in air travel in Europe has gone into reverse.

Eurocontrol said that European airlines such as British Airways and Ryanair had shown traffic declines of 4 percent over the last two weeks.

But striking a positive note, Walsh said that airlines should take comfort from the fact that there was still demand for travel.

"People are comfortable getting on-board. What they're uncomfortable about is the uncertainty as to whether they're going to have to quarantine when they get to their destination or when they return from their destination. That's really what's undermining customer confidence," he said.

After 41 years in the airline industry, former pilot Walsh, was CEO of IAG from 2011 when it was founded. 

IAG owns Irish airline Aer Lingus, British Airways, IAG Cargo, and Spanish airlines Iberia, LEVEL and Vuelin. It also owns rewards programme provider, Avios Group.