IAG Relaunches Plan to Acquire Spain's Air Europa

The European airline group's move appears to be part of a new wave of consolidation in the industry that will be subject to regulatory scrutiny.

Air Europa and Iberia are Spanish airlines. — IAG, which already includes Spanish flagcarrier Iberia, has launched a new bid to acquire Air Europa. (Image: Iberia)

By Cathy Buyck • Contributor - Europe

February 24, 2023

International Airlines Group (IAG) has launched a new attempt to buy Air Europa, two years after it abandoned plans to acquire the Spanish airline. The company had previously dropped its plans amid concerns that Covid-19 travel restrictions would erode long-term demand and assertions by the European Commission that the merger would significantly reduce competition on routes within, to, and from Spain.

Under the terms of the new agreement, IAG will acquire the remaining 80 percent of Air Europa for €400 million ($423.84 million). The group, which includes flagcarrier Iberia, British Airways, Vueling, and Aer Lingus, had already paid Globalia, the Spanish travel conglomerate that owns Air Europa, €100 million in August last year for 20 percent of the airline. That implies a total value for the operation amounts to €500 million for the equity of the company. That is half of the €1 billion that was agreed upon in the original agreement announced in November 2019.

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