Europe’s major airlines may need to consider merging their low-cost arms in order to fend off the challenge of discount specialists led by Ryanair Holdings Plc, International Air Transport Association Chief Executive Officer Alexandre de Juniac said. Fleets of barely more than 100 aircraft at any of the no-frills offshoots of Europe’s three big network airlines fall far short of the 400 planes operated by Ryanair and the 250 at EasyJet Plc, according to De Juniac, who previously led Air France-KLM Group. Air France-KLM, Deutsche Lufthansa AG and British Airways parent IAG SA established the discount brands to compete for traffic on less lucrative routes that don’t feed passengers onto long-haul flights. IAG’s Vueling is currently limited mainly to bases in Spain and Italy, while attempts to expand Air France’s Transavia unit and Lufthansa’s Eurowings have been stymied by union opposition, including clashes that led to De Juniac’s own exit. A more collaborative approach may be necessary because the European market is ultimately too small to support the 10 or so discount carriers currently operating in the region, De Juniac said in an interview in London. The glut in short-haul capacity has weighed on fares and was a factor in bankruptcy filings at Alitalia SpA and Air Berlin Plc. Full-service airlines probably need to retain short-haul operations of some form even away from their hubs, as a complete exit would put them at risk in their domestic markets, according to the IATA chief. Recent Arrivals Consolidation could also focus on newer discount carriers that have grown very quickly, De Juniac said without naming likely targets. That might come via takeovers by better-established no-frills specialists such as Ryanair and EasyJet, or network majors seeking to swell their low-cost operations. Carriers fitting De Juniac’s description might include Wizz Air Holdings. Eastern Europe’s No. 1 discounter, which listed on the London Stock Exchange in 2015, first flew in 2004 a decade after Ryanair and EasyJet had introduced low-cost flights to Europe.  Norwegian Air Shuttle ASA has embarked on cut-price long-haul flights in the past few years after also coming later to the low-cost model. Chief Financial Officer Tore Ostby on Thursday rejected claims from Ryanair CEO Michael O’Leary that it could face a financial crunch, while raising the possibility of bolstering cash through aircraft sales and the disposal of a leasing unit. De Juniac said he doesn’t expect a run of more European airlines getting into difficulties following the Air Berlin and Alitalia filings, with most major carriers performing well so far this year while continuing to grapple with higher taxes and stricter regulation than in some other regions. IATA, which represents 275 carriers accounting for 83 percent of air traffic, said in June that global industry earnings would fall less than previously forecast this year as Europe rebounds from a weak 2016. Net income in the region is expected to slip 14 percent to $7.4 billion, $1.8 billion higher than first projected.