WASHINGTON _ International Airlines Group chief executive Willie Walsh came out touting consolidation – especially for American Airlines, the long-time partner of British Airways – during a speech today and had kind words for both AA chief Tom Horton and US Airways’ chief executive Doug Parker.
While Walsh stopped just short of a full endorsement of a merger between AA and US Airways, he is definitely pushing consolidation as the future of the industry.
"I genuinely believe consolidation is important," he said at the International Aviation Club luncheon in response to a question from the Star-Telegram. "There will be another round of consolidation. American will beat the center of that."
He then said that Parker had "played it well" in making a merger with American a front burner issue. "Doug Parker will be at the center of that. He’s forced the issue of consolidation." Walsh said that Horton’s announcement last week that American would consider merger options even before exiting bankruptcy was evidence that Parker had succeeded in forcing the issue and later described the moves as very "aggressive."
"My interest is making sure that it the right combination for IAG," the parent company of BA and Iberia Airlines. "It’s a nice position to be in, to consider the options around consolidation."
Walsh had earlier praised American and Horton’s decision to seek bankruptcy protection last year. As for a US Airways merger with American, Walsh said, "I would not reject it. I see some merit in it. I see merit in some other consolidation options, as well."
Later, in a scrum with reporters, Walsh elaborated, saying that US Airways’ network would be advantageous with American’s.
Asked about the benefits of American merging before or after bankruptcy, Walsh cited the advantages of a consolidation after "exiting" bankruptcy. "His position in negotiations will be stronger when he’s exited," said Walsh, saying that "historically" mergers took place after bankruptcy.
"From Tom’s point of view," he said, Horton would have “a stronger hand to play. It’s more efficient. That makes a lot of sense to me."
Walsh was also bullish on a merger sticking with the Oneworld alliance. "Without question, I’m sure it will be bigger and will be better."
"I’m really optimistic about this."
Although he said it was "far too early" to predict a merger, he said he gave "credit to Doug – he’s got it on the agenda."
"What Tom said last week demonstrates that."
Although some have criticized Parker for being "aggressive," Walsh said, "If he’d done it any other way, we wouldn’t be here today."
Parker speaks tomorrow at the National Press Club.
To download Walsh's prepared remarks click here.