IAG offers to cede routes to six airlines to avoid problems in Air Europa buyout process

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The IAG group, parent company of British Airways, Iberia, Vueling, Aer Lingus and LEVEL, has offered the European Commission to cede part of Air Europa’s frequencies and routes to Avianca, Binter, Iberojet, Ryanair, Volotea and World to Fly in order to avoid the competition problems detected by Brussels in the process of purchasing Globalia’s airline.

These companies have formally presented their request to take over the routes and frequencies that IAG must divest in order for Brussels to authorize the pending purchase, as explained by the group’s CEO, Luis Gallego, in a conference with the media.

Iberia’s president, Marco Sansavini, detailed that they have presented this option to the Commission so that EU officials can determine “what is the optimal combination to resolve their concerns”.

The Commission does not expressly decide which airlines will be awarded these slots, but rather indicates the routes and frequencies where it detects competition problems, and it will be the airline group that will propose which airlines could be awarded them, according to sources familiar with the process.

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Once this issue is resolved, the winners of these routes and frequencies could be the six companies that are in the process, but there is also a possibility that some may be left out.

“We are going to continue working with the Commission with the aim of reaching a balanced agreement that sufficiently protects competition and, at the same time, allows us to turn Madrid-Barajas into the great ‘hub’ (air traffic connection center) of southern Europe that it should be,” Gallego said.

Unlike the proposal for the transfer of routes (‘remedies’ in EU jargon) presented in the previous attempt with the European Commission in 2021, when a closed package was sent, this time IAG has offered an open list for Brussels to decide which options best fit with its principle of protection of competition.

No routes details

The group has not detailed which routes and frequencies they could cede to other airlines but has recalled that they are willing to transfer up to 40% of the frequencies operated by Air Europa in 2023 and not to leave a single link without competitors.

On April 26, the Commission published its “objections paper” on the Air Europa takeover, which it considered could restrict competition both in the domestic market and on flights to Europe and America.

June 10 is the deadline for the Commission to rule on IAG’s acquisition of Air Europa (of the 80% it does not yet control, for 400 million euros), although group executives do not rule out a ‘clock stop’ if the EU authorities need additional information.

With information from EFE