IAG waives purchase of Air Europa due to European Union requirements
International Airlines Group (IAG) has cancelled the acquisition of Air Europa because “in the current regulatory environment” continuing with the transaction “would not be in the best interest of shareholders,” according to a statement made by IAG to the Spanish Securities and Exchange Commission (CNMV) on Thursday.
IAG – which comprises Iberia, British Airways, Vueling, Aer Lingus and Level – had offered to divest 52% of the routes operated by Air Europa by 2023 to obtain approval from the European Union (EU) competition authorities, which, however, still had objections to the merger.
High demands
IAG sources have explained that the demands of the European Commission’s Directorate General for Competition to give the green light to the operation are so high that it no longer makes business sense for the group, so they have decided not to go ahead.
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According to these sources, the transfer to other competitors of up to 52% of Air Europa’s frequencies and the guarantee that none of the routes on which the European Commission had identified competition problems would be left without a third operator supported the merger.
A list of possible remedy takers
IAG had presented a list of “very solid” potential “remedy takers” (competitors to whom routes are ceded), some of which (such as Volotea and Avianca) had even entered into alliances with each other to be able to carry out operations with the greatest guarantees.
All this has been insufficient for the Commission, so the purchase of Air Europa “is no longer among our objectives”, say the same sources, who “regret the refusal of Brussels to accept this ambitious proposal.
They recall that Brussels has just approved other consolidation operations in the airline industry (the purchase of 41% of ITA Airways by Lufthansa) “and we believe that our proposal met all the conditions to have followed the same path”.
Air Europa stresses that it has a future without IAG
Air Europa, Globalia’s airline, whose purchase has been abandoned by IAG, considers that it has a future on its own and seeks to consolidate its position in connectivity between Europe and America.
Sources of the Hidalgo family’s company have told EFE that the airline has a future “regardless” of the fact that the purchase operation by IAG has been frustrated by the European Commission’s objections.
According to the same sources, it is a solvent company that is developing its strategic plan to consolidate its role in connectivity between Europe and America.
With information from EFE
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