The takeover of Air Europa by IAG is off the table.
The reason for this is the high requirements of the European Commission, which means that a takeover no longer seems sensible from an economic perspective, according to the company.
It has been almost five years since the International Airlines Group (IAG), the parent company of Iberia, among others, first announced that it wanted to buy the Mallorca-based airline Air Europa for around one billion euros.
The group has now definitively decided not to purchase the property.
IAG, which includes Iberia, British Airways, Vueling, Aer Lingus and Level, had already made concessions and offered to give up 52 percent of the routes served by Air Europa in 2023 in order to receive the approval of European competition authorities.
However, they continued to reject the merger.
Particular concerns were raised about the concentration of flight frequencies and routes.
Luis Gallego, IAG’s CEO, is disappointed with Brussels’ stance, especially given that other consolidations in the aviation industry had recently been approved, such as Lufthansa’s acquisition of 41 percent of the shares of Italy’s ITA.
According to Gallego, IAG had pushed itself to the limit of what it could handle, but had nevertheless “failed to meet the Commission’s requirements.”
Therefore, IAG did not intend to make any further attempts at acquisition.
The EU veto over the transaction is “negative for Spain,” mainly because it puts the “hub” Madrid in a worse position compared to its major European competitors such as Paris, Amsterdam and Frankfurt, Gallego says.
Due to the failure of the deal with Air Europa, IAG is considering other acquisitions, such as the purchase of the Portuguese company TAP.
This is 100% owned by the Portuguese state, but the right-wing conservative government of Luís Montenegro wants to privatize TAP.
Air France and Lufthansa have also expressed interest in TAP.
IAG still owns 20 percent of Air Europa, which was acquired in February 2023 for 100 million euros by converting a loan into capital.
IAG subsequently announced that an agreement had been reached with the owner of Air Europa, the Spanish group Grupo Globalia, to take over the remaining 80 percent of the airline’s capital for 400 million euros, German dpa and Spanish media report.
The Air Europa brand would continue to exist under the management of Iberia. (Photo Shutterstock).
