IAG Group buys Air Europa for 1 billion
IAG Group has expressed its intention to purchase Air Europa, a transaction valued at EUR 1 billion. It is a very important transaction on the aeronautical market in Europe, but especially in Spain.
The purchase agreement was signed by International Consolidated Airlines Group ("IAG") and Globalia ("Globalia"). Based on the agreement, IB OPCO Holding SL ("Iberia") agrees to fully take over Air Europa, a transaction valued at 1 billion (1.1 billion).
International Consolidated Airlines Group (“IAG”) brings together British Airways, Iberia, Vueling, LEVEL, Aer Lingus and their subsidiaries.
IAG Group buys Air Europa
Currently, the transaction must receive the necessary approvals from local and European authorities. Personally, I doubt that this transaction will be completed in its current form. The Competition Council will have an important say. However, according to IAG Group, the transaction could be completed in the second jump next year. And if the deal is not successful, IAG has committed to pay 40 millions of euros to Air Europa.
If Air Europa joins IAG Group, Madrid Barajas International Airport will become a real hub for IAG companies. It will be able to compete with the big European hubs in Paris, London or Frankfurt.
At the same time, IAG Group will consolidate its position on transatlantic flights to the Caribbean and South America. Air Europa is one of the largest private airlines in Spain.
Air Europa, one of the largest airlines in Spain
Air Europa operates domestic and international flights to 69 from destinations, including long-haul flights to Latin America, the United States, the Caribbean and North Africa.
In 2018, Air Europa generated revenue of 2,1 billion and an operating profit of 100 million. It carried 11,8 millions of passengers and ended the year with a fleet of 66 aircraft.
It is premature to talk about what this transaction will really mean. Let's wait for the official reaction and the signing of the purchase documents. Then we will see the real plan developed by IAG Group regarding the purchase of Air Europa.