IAG looks at how to appease European regulators to win takeover of Air Europa
International Airlines Group is moving forward with its planned takeover of Spain’s Air Europa by evaluating deal structures that could pass muster with European regulators. The group maintains its goal to close the deal by the end of 2023, even as it lacks a clear path to taking over the Spanish airline, Iberia CEO Javier Sanchez said on the sidelines of the ALTA Leaders Forum in Buenos Aires. IAG owns 20% of the Spanish airline after converting a E100m loan to equity in August. The group previously sought to buy Air Europa outright for E500m but cancelled that transaction last December after regulatory pushback. “The goal is trying to find a new deal … structure before year end, [and] getting the approval maybe post-summer or in the third quarter or beginning the fourth quarter of the 2023,” Sanchez said. The challenge, however, remains convincing authorities in Brussels that the merger is good for consumers, he added. IAG claims that a larger airline, with a greater share of the Spanish — and particularly Madrid — market, would be able to grow more, and expand to more destinations than it can without consolidation. For example, Iberia could offer more flights between Madrid and Asia, a region where it historically has flown little, by merging with Air Europa. “It is also true that we have not being successful in convince the authorities that this, it is good and will be even better in the future for consumers,” Sanchez said. If the Air Europa deal is approved, IAG would control 37 percent of seats in, to, and from Spain based on fourth quarter numbers, according to Diio by Cirum schedules. The group, which owns Iberia, Iberia Express, and Vueling, currently has a nearly 31% share. IAG’s strength would be even greater in Madrid where it hopes to build a “360-degree hub” to compete with the likes of Amsterdam and Frankfurt. The addition of Air Europa would boost its share of seats in the Spanish capital above 50 percent to nearly two thirds, December quarter numbers from Diio show.<br/>
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IAG looks at how to appease European regulators to win takeover of Air Europa
International Airlines Group is moving forward with its planned takeover of Spain’s Air Europa by evaluating deal structures that could pass muster with European regulators. The group maintains its goal to close the deal by the end of 2023, even as it lacks a clear path to taking over the Spanish airline, Iberia CEO Javier Sanchez said on the sidelines of the ALTA Leaders Forum in Buenos Aires. IAG owns 20% of the Spanish airline after converting a E100m loan to equity in August. The group previously sought to buy Air Europa outright for E500m but cancelled that transaction last December after regulatory pushback. “The goal is trying to find a new deal … structure before year end, [and] getting the approval maybe post-summer or in the third quarter or beginning the fourth quarter of the 2023,” Sanchez said. The challenge, however, remains convincing authorities in Brussels that the merger is good for consumers, he added. IAG claims that a larger airline, with a greater share of the Spanish — and particularly Madrid — market, would be able to grow more, and expand to more destinations than it can without consolidation. For example, Iberia could offer more flights between Madrid and Asia, a region where it historically has flown little, by merging with Air Europa. “It is also true that we have not being successful in convince the authorities that this, it is good and will be even better in the future for consumers,” Sanchez said. If the Air Europa deal is approved, IAG would control 37 percent of seats in, to, and from Spain based on fourth quarter numbers, according to Diio by Cirum schedules. The group, which owns Iberia, Iberia Express, and Vueling, currently has a nearly 31% share. IAG’s strength would be even greater in Madrid where it hopes to build a “360-degree hub” to compete with the likes of Amsterdam and Frankfurt. The addition of Air Europa would boost its share of seats in the Spanish capital above 50 percent to nearly two thirds, December quarter numbers from Diio show.<br/>
