Cathay Pacific chairman says global airlines facing consolidation pressure

Economic headwinds are about to usher in a wave of airline industry consolidation globally, said John Slosar, chairman of Cathay Pacific Airways.

Speaking at an industry gathering on Wednesday, Slosar said industry consolidation, the emergence of Chinese airlines as international brands, and investment into data analytics are among the ongoing trends in the industry.

His remarks comes as a pending stake sell by Air New Zealand in Virgin Australia has attracted a slew of Chinese suitors including Hainan Airlines, China Southern Airlines as well as Cathay, according to the Australian Financial Review.

Cathay chief executive Ivan Chu had said the speculation on Virgin was “groundless”.

Hainan, the flagship carrier of the acquisitive HNA Group, and China Southern, the largest Chinese carrier on the China-Australia market, are both deemed logical buyers by analysts. Owning part or all of Australia’s second-largest carrier would not only give network access to the Chinese airlines eager to enhance their global networks, but allow them to benefit from the increasing number of Chinese tourists taking short flights within Australia.

Slosar said traffic is far less concentrated around Asia’s big airlines than it is for their US counterparts, after repeated mergers and restructurings helped to transform the formerly loss-making US airline sector into one with healthy profits.