Lufthansa CEO Says Intercontinental Takeovers Inconceivable
Deutsche Lufthansa AG (LHA) Chief Executive Officer Christoph Franz said consolidation in the airline industry will be focused within Europe and the U.S. in the short term, while intercontinental takeovers are “not conceivable”.
The slowing of “liberalization” in the industry makes major intercontinental deals unlikely, Franz said in Planet magazine, which is published by Lufthansa’s cargo unit.
“I do not see a near-term perspective for transatlantic majority takeovers, because the dynamics of liberalization in recent years have declined very clearly,” Franz said, adding that Asian takeovers are also unimaginable. “In the long term, there will certainly be global perspectives.”
Under Franz’s predecessor Wolfgang Mayrhuber, Cologne, Germany-based Lufthansa acquired Austrian Airlines and Swiss International Airlines, as well as stakes in JetBlue Airways Corp. (JBLU) and Brussels Airlines NV. In May, the carrier said it may consider making a bid for Portugal’s TAP SGPS SA. Outgoing Chief Financial Officer Stephan Gemkow said last week he saw few attractive acquisition targets in Europe.
“The path towards consolidation via acquisitions is increasingly being replaced by a market adjustment via airline bankruptcies,” Franz said. “This trend will -- to the disappointment of the employees affected -- continue and reduce the variety of airlines in Europe.”
Europe’s second-biggest airline still doesn’t rule out acquisitions in the region, Franz said separately today in a speech in Zurich. “We have to be open to taking part in the consolidation process in Europe,” he said.
-- With assistance from Stefanie Knoll in Zurich. Editors: Robert Valpuesta, David Risser
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