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IAG drops planned Air Europa acquisition
British Airways parent International Airlines Group (IAG) has finally pulled the plug on its bid to acquire Air Europa.
IAG said it wasn’t likely to be approved in the current ‘regulatory environment.’
Air Europa is Spain’s second largest airline.
The European Commission had already voiced concerns about the airline acquisition as IAG also owns Iberia.
It would have given IAG a dominant position on several routes, especially from Madrid.
IAG would have had a large market share on flight between Spain and Latin America.
Iberia loaned Air Europa funds to help it survive the pandemic downturn.
It then converted these funds to a 20% stake.
IAG then agreed to purchase the remaining 80%.
The European competition regulator opened an investigation and made it clear there were serious competition issues, that would likely mean giving up some routes and slots.
IAG must now pay a €50 million ‘kill fee’ to Air Europa as compensation, but says it will retain its existing 20% shareholding.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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