Iberia (IB, Madrid Barajas) parent IAG International Airlines Group will pay EUR400 million euros (USD423.7 million) to Globalia for the remaining 80% of Air Europa (UX, Palma de Mallorca) to take full ownership of the airline, it announced in a statement released on the evening of February 23.
IAG said that “the acquisition remains strategically important for the group and positions it to benefit from growth opportunities in the Latin America and Caribbean market, as well as to increase connectivity to Asia.” The Anglo-Spanish holding bought its current 20% stake in August 2022 for EUR100 million (USD106 million),
“Upon completion,” it said, benefits of the deal include “transforming” its Madrid Barajas hub to compete with Europe’s largest hubs, “enhancing IAG’s position in the highly attractive Europe to Latin America and Caribbean market, and enabling the company to open routes to new destinations in Asia.”
It will also offer “significant synergies, in line with those of previous acquisitions, to be delivered around 2026 to 2028” if the deal is completed, and once antitrust authorities approve it, in the next 18 months. On completion, the Air Europa brand will be retained under the management of Iberia.
The first EUR200 million (USD212 million) will be paid once the authorities approve the deal, comprising EUR100 million in IAG shares and EUR100 million cash, followed by a further EUR100 million cash on each of the first and second anniversaries of closing.
In its own statement, Globalia said the acquisition “will consolidate the offer for air connectivity between Europe and America, especially with Latin America and the Caribbean region, where Air Europa has a wide network of destinations and a solid presence and recognition, establishing, in turn, a solid link from the American continent to Asia and the Middle East.”
It added: “This will allow Spain to compete on an equal footing with other European connection hubs and will contribute not only to accelerating economic development on both sides of the Atlantic but also to the recovery of the tourism industry with the implementation of a new, more innovative, model.”
According to the ch-aviation fleets module, Air Europa currently operates a fully dry-leased fleet of forty-three Boeing aircraft, namely twenty B737-800s, eleven B787-8s, and twelve B787-9s. The fleet at Iberia and budget unit Iberia Express, by contrast, is all-Airbus (six A319-100s, twenty-seven A320-200s, fourteen A320-200Ns, fifteen A321-200s, six A321-200NXs, seventeen A330-200s, eight A330-300s, and sixteen A350-900s).
The protracted takeover began in November 2019 when IAG announced it would buy Air Europa for EUR1 billion (USD1.1 billion at the time) in cash, but the onset of the pandemic and competition concerns disrupted the merger. The Spanish government approved a EUR475 million (USD564 million at the time) bailout for Air Europa in November 2020, part of which could be converted into equity, so Madrid has played a role in the talks since then, most recently nudging the two sides together in January 2023 to finally agree on a deal.
The ch-aviation capacities module shows that Iberia, British Airways, Aer Lingus, and Vueling Airlines, which are all owned by IAG, currently have a 48.35% market share by scheduled weekly capacity at Madrid Barajas. Air Europa has an 18.88% share and is the second-largest operator at the hub behind Iberia. The largest airline not affiliated with IAG is Ryanair with a 10.53% market share.
