IAGthe parent company that owns Iberia, has formalized the request for the purchase of Air Europa before European Commission. From this moment, “there are months of work to come”, but the company hopes to be able to close it as quickly as possible in 2024. The airline presented to the competition a transfer offer that is “significantly superior” to that of the previous process, in which he failed to convince the community authorities.
“He “remedies” package (measures to ensure competition) is very ambitious. IAG/Iberia hopes that it will fully address any concerns the Commission may have. The proposal is considerably increased carried out on the previous occasion to ensure strong competition on all routes”.
At the same time, he emphasizes that “a broader approach is proposed regarding “”remedy takers (interested in assets and rights for sale). And adds that “Several companies have expressed great interest in being awardedwhich shows the importance and viability of the package.”
Last February, three years and more than three months after the first purchase announcement, Iberia finalized the purchase of Air Europa with the Hidalgo family for a total of 500 million euros, as both companies announced after the market closed. The agreement provided for the acquisition by the IAG group of the remaining 80% of Air Europa – after paying 100 million in August for 20% of the company – for 400 million euros.
The CEO of IAG, Luis Gallegostressed that “this agreement will provide benefits to consumers and the Spanish economy in general, in addition to improving the competitiveness of Madrid compared to other hubs in Europe”.
Iberia sources emphasize that “this operation is good for Spain: It will improve the connectivity and competitiveness of the Madrid hub in Europe, create quality jobs, contribute to the development of tourism and stimulate economic growth.“.
Increase in routes
According to the airline, the benefits for consumers will result in an increase in routes, frequencies and, thanks to the optimization of flight schedules, also in flexibility for travelers. Another variable is that it will facilitate at least 500 new origin and destination combinations and, in particular, routes to Asia from Spain.
Regarding at the Madrid-Barajas hub and for European competitiveness, they emphasize that “the operation will transform Madrid Barajas and increase air competition both within Europe and between Europe and the rest of the world.” It will thus be able to compete with the major “hubs” of the European Union (EU) such as Paris, Munich, Frankfurt and Amsterdam (all with a single reference airline).
Iberia and Air Europa will together a quota similar to that of the main European airlines in their hubs”. It will be at the same level as Air France in Paris and will remain lower than Lufthansa in Munich or KLM in Amsterdam. The merger, in turn, will increase Madrid-Barajas traffic by at least 1.6 million passengers per year, as this scale allows greater connectivity and generates additional demand.
For Spain, this integration will constitute a “Madrilenian hub” The most powerful will better position the country in the global economy, according to the same sources. It is estimated that the operation will generate between 1,250 and 1,800 direct jobs, an increase in Madrid Airport’s annual revenue of almost 30 million euros, as well as an increase in cargo traffic of 16,000 tons. According to them, the operation will also make Air Europa a more sustainable company.