IAG reaches agreement to acquire Air Europa

International Airlines Group has reached a new agreement to take 100% control of Spanish carrier Air Europa.

IAG expects the deal to close in approximately 18 months, pending regulatory approval. IAG already owns Spanish airlines Iberia and Vueling. IAG also is the parent of British Airways, Aer Lingus and Level.

“This agreement will enable IAG’s Madrid hub to compete on an equal footing with other European hubs and consolidate its position in the South Atlantic,” IAG CEO Luis Gallego said Thursday. “Madrid is the main gateway between Latin America and Europe and there are opportunities to expand its network, providing significant benefits to our customers, employees and shareholders.”

IAG intends to retain the Air Europa brand but place the airline under Iberia’s management and integrate its network into the existing Iberia hub structure in Madrid. 

IAG already owns 20% of Air Europa, having executed an option last August to convert a loan of 100 million British pounds to Air Europa parent Globalia into equity. The airline group would purchase the remaining 80% of Air Europa for 400 million British pounds in cash and IAG shares.

This is the second time IAG has entered into an agreement to take control of Air Europa. The airline group also pursued an acquisition between 2019 and 2021. But the effort was slowed by the pandemic and then fell through amid scrutiny from European Commission regulators over whether such a takeover would reduce competition on Spanish domestic and international routes.

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