Alan said this because Igneel was now merely a Dragon Seed. While he could indeed temporarily manifest a physical body through the Dragon Seed, it was a one-time thing; once used, it would be gone. In the original story, even without Acnologia, Igneel would have eventually perished.
Through Igneel's account, Natsu understood the crux of the problem, and he immediately thought of his most respected big brother Alan, hoping Alan could think of a way to let these Dragon Kings regain their physical bodies.
Alan actually had a way, which was to convert the Dragon Seeds representing these Dragon Kings into Digi-Eggs, and then have Natsu and the others hatch them. This would be equivalent to giving Igneel and the others a new lease on life. Although all their previous power would be gone, once transformed into Digimon, given the lifespan of Dragon-type Digimon, they would all become everlasting beings. However, the amount of data and magic power required to convert them from Dragon Seeds into Digi-Eggs was simply too vast. If it were Alan, he could indeed do it, but Natsu and the others insisted that this task had to be done by them!
Chapter 196