(MENAFN - ProactiveInvestors - UK) The owner of British Airways has put its expansion plans on hold due to uncertainty caused by the euro crisis, its boss said today.
Willie Walsh, chief executive of International Consolidated Airlines (LON:IAG), told reporters the group is not looking at any more acquisitions at present.
"I don't see there's anything likely to be available in the short term that would be of interest to us," he said.
IAG had been mulling an an offer for TAP, Portugal's state airline, to beef up its flights to South America and Brazil in particular.
However, Walsh said that any bid for TAP is now "highly unlikely", adding "Even if competitors in Europe express interest in it, it wouldn't change my view."
IAG also owns Spain's Iberia and recently increased its presence at London's Heathrow through the acquisition of BMI.
Separately, heavyweight broker HSBC today picked IAG as its favourite share in a bullish overview of Europe's national airlines.
The broker says history has shown the time to invest is when the stocks are out of favour and the market preoccupied with alarming newsflow and macro uncertainty, like after 9/11, during the credit crunch, and HSBC argues, now, in the midst of the eurozone crisis.
HSBC believes unit revenues of the major carriers might surprise positively this summer, given capacity moderation, consolidation and improving alliance coordination.
The flag carriers will also make some progress in restructuring their short haul operations, against the backdrop of rising unemployment and structurally there will be a move towards cross-regional consolidation, the broker suggests.
"This could pave the way for the industry to free itself of its anachronistic regulatory ownership structure."
In choosing IAG as its favourite pick, HSBC suggests the economic malaise of Spain has meant investors have forgetten the original logic of the combination of BA with Iberia.
HSBC contends this still has merit and the triangle across the Atlantic remains an attractive strategic position.
The company's two key initiatives integrating bmi and launching Iberia Express can both be successes and BA will be able to exceed expectations on the restructuring of bmi, it adds.
"We think the Iberia management team has the right political moment (right wing government and economic uncertainty) to restructure Iberia's short haul business."
HSBC has a target price of 200 pence for IAG. The shares dipped 1 per cent to 144.2 pence.