IAG to acquire Air Europa for €1 Billion

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In an official press release the International Airlines Group (IAG, parent company of Aer Lingus, British Airways, Iberia and others) announced that it has reached an agreement to acquire the entire issued shares of Spanish carrier Air Europa. The transaction comes with a price tag of €1 billion.

As of now, Air Europa is a member of SkyTeam alliance. The airline operates 64 aircraft (25 long haul and 39 short haul). It focuses on inner European connections as well as long haul routes to Middle- and South America. Given the pending approval, IAG has announced its intentions to keep the Air Europa brand. Structurally, the airline will be tied much closer together with Iberia.

The deal still needs to be approved by the European Union, more specific its comission on competition. There are some serious antitrust concerns. Because of the possible merger, Iberia and Air Europa would have a quasi monopoly on Europe to Latin America routes. In addition, the same applies to domestic routes within Spain.

IAG made it clear that they intend to expand operations at Madrid-Barajas airport. The goal is that it can compete with major European hubs Amsterdam, Frankfurt, London-Heathrow and Paris Charles-De-Gaulle.

Further, the press release states that Air Europa will be integrated to an Avios based frequent flyer program. That makes its exit from SkyTeam almost certain. From an alliance standpoint, there are two obvious solutions for Air Europa’s future: It will either join Oneworld (like British Airways & Iberia). Or will continue as an alliance free carrier under IAG leadership (like Vueling, Aer Lingus and Level).

After receiving the necessary approval, IAG plans to complete the acquisition as early as the second half of 2020.

Cover Picture: Pixabay-User Sarah_Loetscher / CC0-Lizenz

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