IAG, through Iberia, incorporates Air Europa to its airline group
The airlines will continue to compete until the operation is approved and closed
The IAG group today announced the agreement with Globalia for the purchase of one hundred percent of the capital of Air Europa, through IBERIA, an operation valued at around 1,000 million euros, which will be paid in cash at the end of the process of purchase.
This agreement allows Air Europa to join a solid group of airlines that have grown and improved their performance within IAG, and have benefited from all the opportunities that the group offers them, from which Air Europa will also benefit, which It will keep its mark.
This operation will contribute to making Madrid a more efficient hub, which will be able to compete better and with better tools with the main hubs in Europe. In addition to contributing to the network of routes between Europe and Latin America, it will allow for more connectivity and critical mass to open new routes and grow in other markets where it is not present or its presence is very small and offer better services to customers.
The purchase operation is expected to be completed in the second half of 2020, after receiving all necessary approvals.
Meanwhile, Air Europa and IAG airlines will continue to compete as before.
Willie Walsh, CEO of IAG, commented: “the acquisition of Air Europa means adding a new competitive and profitable airline to IAG, making Madrid a leading European hub and allowing IAG to achieve the leadership of the South Atlantic, thus generating value Additional financial for our shareholders.
IAG has a solid track record of successful acquisitions, the most recent with the acquisition of Aer Lingus in 2015, and we are convinced that Air Europa represents a great strategic fit for the group ”.
Javier Hidalgo, CEO of Globalia, said: “For Globalia, the incorporation of Air Europa into the IAG Group means a strengthening of the present and future of the company, which will maintain the line followed by Air Europa during the last years. We are convinced that it will be a success for Air Europa to join a Group such as IAG, which has demonstrated during all these years its commitment to the development of the airlines that make them up and to the Madrid hub ”.
Luis Gallego, CEO of Iberia, considers that “This operation is of great strategic importance for the Madrid hub that, in recent years, had lagged behind other European hubs. After this agreement, Madrid will be able to compete with other European hubs on equal terms, with a better position on the routes from Europe to Latin America and the possibility of becoming a gateway between Asia and Latin America. ”
Madrid is a hub with a lot of potential but has been losing positions with respect to the big European hubs, both in size, as well as in the number of flights, destinations and passengers.
Of the 20 largest airports in Europe, Madrid ranks number 19 in terms of the number of destinations offered.
To compete with the rest of European hubs, the Spanish capital airport needs to be more efficient, because in aviation, more than individual airlines, hubs and large groups compete. It is well located geographically for traffic between Europe and Latin America, but its weight in other large markets, such as Asia or Africa is minimal.