Germans good at “extracting maximum price from people”, says Eddie Wilson
Ryanair CEO, Eddie Wilson has warned that every airline that Lufthansa buys will be smaller in a few years – predicting that the same will happen with TAP if the German group acquires it.
One of the things Germans are really good at is “extracting the maximum price from people”, which is why they bought Brussels Airlines, Austrian Airlines and Swiss and never expanded, Wilson told Spanish news agency EFE.
The way he reads Lufthansa’s interest in TAP is that the Portuguese company has a good market in South America, especially in Brazil. “Lufthansa can retain some of that (…) They’d be stupid not to, but the company won’t grow, and will become smaller“, he warned.
Regarding the future of Italian airline ITA Airways after its integration into the German group, Eddie Wilson believes they will initially establish more routes to Milan and Rome and then put them back into Lufthansa’s hubs in Frankfurt and Munich.
It’s “a very simple business manual”: buy the airline for half nothing, restrict capacity, increase prices, don’t compete on short journeys and operate all long-haul traffic through Germany.
“So, unfortunately, the Italians will be eating more sausages in Munich and Frankfurt”, he quipped.
On the other hand, IAG, the International Airlines Group that owns Iberia, Vueling and British Airways has done ‘a good job’, because when it bought Aer Lingus in Ireland, it made a success of it, made it grow more as a long-haul airline than a short-haul one.
British Airways too became a long-haul carrier. IAG is a group “focused on growth”.
Regarding TAP, the understanding is that Air France-KLM is also in the running for the long delayed reprivatisation.
Wilson, meantime, has “refused to rule out the possibility of Ryanair conducting some kind of corporate operation in the future”, says EFE, albeit he said he would rather add 50 Boeing aircraft to Ryanair’s fleet than buy an airline with 50 planes.
“My preference is for organic growth, but if there are opportunities you always have to look at them”, he said.
In short, Ryanair believes that consolidation in the sector is good, and supports it, because having fewer airlines “is more stable and better for consumers in the long term”.
TAP has been earmarked for reprivatisation for years now. Lufthansa CEO Christian Spohr has been in Lisbon recently – and TAP is back in the news ‘for all the wrong reasons’. The flagship airline has already cost Portuguese taxpayers upwards of €3 billion SINCE it was wrestled back from the Atlantic Gateway consortium by PS Socialists in 2020. ND
Source material: LUSA/ EFE
