British Airways owner IAG's shares rose more than 7% on Friday, after the company's strong second-quarter performance and its move to scrap a proposed takeover of Spanish airline Air Europa. IAG's results outshone rivals which have had a more challenging second quarter marred by rising costs and a slow down in so-called "revenge travel" demand where people rushed to take foreign trips just after the pandemic. The company's decision to abandon the Air Europa deal, which faced complex competition issues, was seen as a positive step. "We had seen it difficult to envisage regulatory approval for this deal ... and find this development unsurprising," said Neil Glynn, director of airline industry analyst AIR Control Tower. IAG shares were up 7.5% at 1035 GMT, topping London's benchmark index in contrast to other airline shares which have struggled. IAG CE Luis Gallego on Thursday said the Air Europa deal was no longer in shareholders' interests after the EC said IAG's proposed concessions were not enough. The EC in a statement said it took note of IAG's decision. "Our in-depth analysis indicated that the merger would have negatively affected competition on a large number of domestic, short-haul and long-routes within, to and from Spain on which the two airlines compete closely", EU antitrust chief Margrethe Vestager said. "The remedies submitted did not fully address our competition concerns", she added. "The remedies submitted did not fully address our competition concerns", she added. IAG had announced it would buy out the 80% of Air Europa it did not already own for about E400m. JP Morgan analysts said IAG would also save about E350m in break-up fees, which could mean higher shareholder returns. IAG's decision to drop the Air Europa deal was seen as negative by some analysts who were hoping for more consolidation, but there was still optimism about the group's strategy for the remainder of the year.<br/>"Clearly, Q3 will be another test for the resilience of pricing and IAG doesn't guide on forward yields, but lower capacity growth and 'continuing strong demand' should bring comfort for now," analysts at JP Morgan said. IAG's second-quarter operating profit of E1.24b beat market expectations of E1.08b, driven by demand for travel in its primary North Atlantic market.<br/>
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Asian carriers Singapore Airlines Ltd., Eva Air Corp. and China Airlines Ltd. have temporarily stopped flying over Iranian airspace as tensions escalate in the Middle East. Flights operated by the three airlines were seen to be skirting to the north of Iran over central Asian countries such as Azerbaijan and Turkmenistan, FlightRadar24 plane tracking shows. All Singapore Airlines and flights at low-cost carrier Scoot have stopped flying over Iranian air space and are using alternative flight paths, the carrier said in a statement, adding that it hasn’t canceled any flights. “We will continue to closely monitor the situation in the Middle East and adjust our flight paths as needed,” Singapore Air said. Thai Airways International Pcl said it has also stopped flying over Iranian airspace, while Air India suspended its scheduled flights to and from Tel Aviv until Aug. 8, citing the ongoing situation in parts of the Middle East region. The move comes just days after Iran blamed Israel for the assassination of a top Hamas official in Tehran and vowed retaliation, inflaming tensions in the region. Singapore Air had only recently resumed flying over Iran after avoiding the area for two months, which had led to lengthy and costly detours. <br/>
Hyundai Glovis looks set to invest in a consortium led by Air Incheon, which has been selected as the preferred bidder to acquire Asiana Airlines’ cargo business, according to industry officials, Sunday. Its move is interpreted as part of efforts to foster the air cargo business as a new growth engine. “We are considering joining Air Incheon’s acquisition of Asiana’s cargo business as an investor,” Hyundai Glovis said in a regulatory filing Friday. Although Hyundai Motor Group's logistics unit added that nothing has been decided yet, the company is reportedly planning to invest around 100b won ($74m) in a private equity fund holding an 80.3% stake in Air Incheon. Hyundai Glovis is said to have once considered the direct acquisition of Asiana’s cargo business when it was put up for sale as part of Korean Air's attempts to win the European Union’s conditional approval for the takeover of a smaller competitor. However, only air carriers were allowed to participate in the bid, so Hyundai Glovis appears to have changed its plan. Given that Hyundai Glovis said in June that it would draw up aggressive growth strategies, there is speculation that the logistics firm may take over Air Incheon, once the budget carrier merges with Asiana’s cargo business. “Depending on strategic needs, we will consider M&As for our growth,” Hyundai Glovis CEO Lee Kyoo-bok told investors at that time.<br/>