UK media have been speculating that IAG International Airlines Group may be in the market to snap up struggling TAP Air Portugal (TP, Lisbon), which Lisbon is trying to re-privatise, or loss-making budget carrier easyJet (London Luton), in another attempt to consolidate the European airline industry.

The Times has claimed that speculations are growing that IAG could use its faster-than-expected recovery and strong liquidity to buy-up struggling rivals.

IAG - an Anglo-Spanish multi-airline conglomerate including British Airways, Aer Lingus, Iberia, Vueling Airlines, and LEVEL - has posted positive third-quarter 2022 results showing an operating profit of EUR1.2 billion (USD1.1 billion), liquidity of over EUR13 billion (USD12.9 billion), and plans to cut its EUR11 billion (USD 10.8 million) debt, reporting buoyant passenger demand and recovering load factors. "All our airlines were significantly profitable," reported Chief Executive Officer Luis Gallego. "We are focused on adapting our operations to meet demand, strengthening our balance sheet by rebuilding our profitability and cashflows and capitalising on our high level of liquidity. This will allow us to allocate capital while investing in a disciplined way in our service and our people, to build capacity and enable future growth," he said in a statement.

According to The Times, he had added: "We are a platform for consolidation. We will only do what makes sense, but we see there are opportunities to be stronger. We are a group that wants to consolidate the industry". Sources close to the topic told ch-aviation that Gallego had not named easyJet or TAP during the 3Q22 results briefing with UK media on October 28. He had been talking about IAG as a platform for consolidation, and had only mentioned Air Europa (UX, Palma de Mallorca), in which IAG has a 20% stake, the sources said.

When contacted by ch-aviation, easyJet declined to comment "on something that has simply arisen due to the speculation of one journalist".

A TAP spokesperson declined to comment, saying it was a shareholder matter.

In any case, any such purported plans would have to make it past the European Commission's merger regulations. European Union airlines are subject to comprehensive competition law and state aid provisions to ensure that they all compete on fair grounds within the EU single aviation market.

In 2021, the EC raised concern about IAG's proposed acquisition of Air Europa. In the end, IAG terminated its November 2019 acquisition plans but took a 20% stake in the airline as part of its ambition to develop the Madrid Barajas hub.

Still, easyJet shares surged following the speculative report. The budget carrier has reported headline losses of between GBP170 million pounds (USD196 million) and GBP190 million (USD219 million) for the financial year 2022, citing the impact of Omicron, the war in Ukraine, and industry-wide capacity issues last summer having affected its operational performance.

IAG is not the only airline group interested in easyJet. Indigo Partners – which owns stakes in Hungarian low-cost carrier Wizz Air, Frontier Airlines in the US, JetSMART in Chile, Volaris in Mexico, and Canada's Enerjet – has also reportedly shown an interest. Co-founder and managing partner Bill Franke 2021 said the group was "actively considering opportunities". "It's a time for the industry to look at consolidation, and we would clearly like to be a consolidator," he told The Financial Times at the time. In September 2021, easyJet had rejected an unsolicited takeover bid from WizzAir.

For its part, the Portuguese government intends to reprivatise TAP within 12 months. "That is what is planned", Prime Minister António Costa has been quoted by Dinheiro Vivo.

Finance Minister Fernando Medina confirmed this in parliament on October 21, when he said that "neither income nor expenses are foreseen with the privatisation of TAP, that will take place in time, and in a way that values the company and the national interest".

Minister of Infrastructure Pedro Nuno Santos earlier disclosed the sale price could be lower than the EUR3.2 billion (USD2.9 billion) of Portuguese state aid under the restructuring plan. "Sell for less than the injection... let's see how the IPO will be done. An assessment will be made that is independent of the value that was injected into the company. This value will be determined when the IPO takes place," he said.

In September, Chief Executive Officer Christine Ourmières-Widener acknowledged that "being part of a large group would be a source of resilience for the future".