The chief executive of International Airlines Group (IAG), the parent company of British Airways, has highlighted the challenges posed by European competition rules in pursuing a potential bid for easyJet. Luis Gallego said that, under current regulatory frameworks, acquiring the low-cost carrier would be “very, very difficult” and called for a revision of how Brussels evaluates airline mergers to better facilitate consolidation in the sector.

EasyJet’s future has become uncertain following an indication from US private credit group Castlelake last month that it is considering a formal offer for the budget airline. Castlelake has until June 26 to submit a formal bid, and any proposal is expected to include European partners to comply with local ownership regulations. However, IAG and competitors such as Air France-KLM would face significant antitrust hurdles due to overlapping routes if involved in such a deal.

While Gallego declined to comment directly on Castlelake’s interest, sources familiar with the matter state that IAG is not currently in talks with the US group. Instead, he stressed the need for regulatory changes to allow greater airline consolidation across Europe. "We need scale if we want to compete globally," he said, adding that the aviation industry must consolidate to become more efficient and stronger.

Gallego also reflected on a previous acquisition attempt by IAG, noting that the group abandoned its bid to purchase the remaining 80% stake in Spanish airline Air Europa in 2022 (one source notes 2024) after the European Commission raised competition concerns. He said the regulatory conditions and required remedies made the deal untenable, but still acknowledged Air Europa’s value in expanding Madrid’s position as a hub and its benefit to customers. IAG maintains a financial stake in the Spanish carrier despite withdrawing from the transaction.

He further argued that regulatory assessments should focus more on transfer traffic and competition between hub airports rather than point-to-point traffic, which represents a smaller proportion of flights at major hubs. According to Gallego, integration with Air Europa would have increased the number of origins and destinations served, but he affirmed that IAG can continue to grow without the acquisition.

Formed in 2011 through the merger of British Airways and Iberia, IAG has positioned itself as a leading consolidator in the European airline market. The group also owns Aer Lingus and Vueling and remains engaged in exploring opportunities to strengthen its portfolio amid a shifting competitive landscape. However, the current regulatory environment continues to present significant obstacles for large-scale mergers and acquisitions within Europe’s aviation sector.