International Airlines Group (IAG) has announced it will buy Madrid-based Air Europa for €1 billion.
The Spanish airline will be acquired by IAG subsidiary Iberia, with the group stating that the brand “will initially be retained and the company will remain as a standalone profit centre within Iberia run by Iberia CEO Luis Gallego”.
IAG said that the move would transform its Madrid hub “into a true rival to Europe’s four largest hubs: Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle”, and would re-establish the group “as a leader in the highly attractive Europe to Latin America and Caribbean market”.
With the acquisition, IAG plans to integrate Air Europa into its existing Iberia hub structure at Madrid, create commercial links between Air Europa and other IAG operating companies, in addition to adding reciprocal intra-group codeshares “across all connecting gateways”, and integrating Air Europa into the Avios programme.
Air Europa currently flies to 69 domestic and international destinations, and had a fleet of 66 aircraft at the end of 2018. It became a Skyteam alliance member in 2007, though it will now presumably leave the alliance.
Commenting on the announcement, Willie Walsh, chief executive of IAG, said:
“Acquiring Air Europa would add a new competitive, cost effective airline to IAG, consolidating Madrid as a leading European hub and resulting in IAG achieving South Atlantic leadership, therefore generating additional financial value for our shareholders.
“IAG has a strong track record of successful acquisitions, most recently with the acquisition of Aer Lingus in 2015 and we are convinced Air Europa presents a strong strategic fit for the group.”
Air Europa is the third largest Spanish airline after Iberia and Vueling – both of which are already part of IAG. The transaction is expected to complete in the second half of 2020, providing IAG is granted relevant approvals.