BUSINESS NEWS
Air Europa is Spain’s third- largest carrier and last year carried 11.8 million passengers
IAG needs approval for €1bn Air Europa swoop
BA parent expects regulatory sign-off for deal for Spanish carrier. By Ian Taylor
International Airlines Group’s €1 billion deal to buy Air Europa, announced on Monday, is unlikely to escape serious study by competition authorities, with one leading analyst warning it threatens “market distortion”. British Airways parent IAG said
Iberia would take over Air Europa from Spanish group Globalia, retaining the carrier’s name and operating it separately, at least initially. IAG said it expects the acquisition
to complete by the second half of next year. However, EU and Spanish
competition authorities are likely to take a close look as Air Europa is
72 7 NOVEMBER 2019
Spain’s third-largest carrier and IAG already owns the two biggest, Iberia and Vueling. Ryanair chief executive Michael
O’Leary wasted no time in demanding action from regulators, saying: “It’s a good deal for IAG. It’s a bad deal from a competition point of view. We’ll be looking for the competition authorities to require some divestments, particularly in Air Europa’s short-haul presence on Spanish domestic routes and European short-haul.” Te acquisition would substantially
increase IAG traffic at Madrid Barajas airport, especially to Latin America. IAG’s share of the Europe-Latin
America market would increase from 19% to 26%. A leading aviation analyst told
Travel Weekly: “It will give IAG the two main airlines operating to Latin America out of Madrid and all the connecting traffic. It would appear to materially affect the competitive dynamics and there is the potential for market distortion.” He said a go-ahead for the deal
“will depend on the market remedies” demanded by regulators. IAG confirmed it would pay a
€40 million break fee to Globalia if the Continued on page 70
travelweekly.co.uk
BUSINESS NEWS
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