The parent company of British Airways and Iberia, International Airlines Group (IAG) has agreed to buy Spanish rival Air Europa for 1 billion euros ($1.1 billion).
In a statement released on 4th November, the completion is expected to take place in the second half of 2020. The Air Europa brand will initially be retained and the company will remain as a standalone profit center within Iberia run by Iberia CEO Luis Gallego.
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.”
Javier Hidalgo, Chief Executive of Globalia was quoted saying: “For Globalia, the incorporation of Air Europa to IAG implies the strengthening of the company’s present and future that will maintain the path followed by Air Europa in the last years. We are convinced that the incorporation of Air Europa to a group such as IAG, who over all these years has demonstrated its support to the development of airlines within the group and the Madrid hub, will be a success”.
Luis Gallego, Chief Executive of Iberia commented: “This is of strategic importance for the Madrid hub, which in recent years has lagged behind other European hubs. Following this agreement, Madrid will be able to compete with other European hubs on equal terms with a better position on Europe to Latin America routes and the possibility to become a gateway between Asia and Latin America.”
Air Europa operates 66 aircraft to 69 destinations in and outside of Spain. As one of the world’s largest airline groups, IAG flies to 268 destinations with 573 airplanes.