Lufthansa May Be Close to Acquiring 20% of Air Europa: What It Means for European Aviation
Lufthansa, Europe’s largest airline group, appears to be on the verge of finalizing a deal to acquire 20% of Air Europa, surpassing competitors such as Air France-KLM, Delta Airlines, and Etihad, according to El Economista. This move is key for both the German group’s expansion and the financial recovery of the Spanish airline following the impact of the pandemic.
Background of the Negotiation
The Hidalgo family, which owns 80% of Air Europa through Globalia, has been seeking a strategic partner to not only improve the airline’s financial situation but also facilitate its global expansion without relinquishing full control. Lufthansa has emerged as the most viable partner, especially after acquiring 41% of ITA Airways in a deal valued at €325 million, which was approved by the European Commission.
In contrast, competition authorities have previously shown resistance to similar cases, such as when IAG (the parent company of Iberia and a 20% minority shareholder of Air Europa) attempted to acquire the airline. This underscores the importance of a strong European partner like Lufthansa.
→ Air Europa will fly between Madrid and Istanbul starting in May
Lufthansa’s Strategic Interests
The deal aligns with Lufthansa’s strategic objectives to strengthen its presence in key markets such as Spain, particularly the Balearic Islands, a primary destination for German, Austrian, and Swiss tourists. Currently, 42% of German tourists visiting Spain choose the Balearic Islands, making this travel corridor a significant asset for the German group.
Additionally, Lufthansa seeks broader expansion in the transatlantic market. The acquisition of ITA Airways has allowed the company to consolidate Rome-Fiumicino Airport as a strategic hub in southern Europe, from which it plans to launch new routes to Latin America, including destinations in Colombia and Brazil.
Financial Implications for Air Europa
Air Europa urgently needs fresh capital to meet its financial obligations, such as the €235 million ordinary loan granted by SEPI during the pandemic, which must be repaid by the end of 2026. The airline also seeks to refinance another €240 million owed to the Official Credit Institute (ICO).
In December 2024, the Spanish airline managed to correct its financial imbalances through a capital injection of €81 million. Of this amount, €65 million came from real estate assets contributed by the Hidalgo family, while IAG contributed an additional €16 million to avoid dilution of its stake in the company.
Outstanding Operational Results
Air Europa closed 2024 with record figures. Its revenue grew by 6% compared to 2023, reaching €2.9 billion, and its net profit approached €200 million. This performance has increased its market value by 30%, rising from €500 million to €650 million between 2022 and 2024. Additionally, the number of passengers increased by 4.4% in 2024, surpassing 12 million.
With these figures, the airline expects to achieve revenue exceeding €3 billion in 2025, consolidating its position as one of the most relevant players in the Spanish and European aviation sectors.
The potential entry of Lufthansa as a partner for Air Europa would not only mark a milestone in the history of both companies but also reshape the landscape of European aviation.
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