IAG has signed an agreement to purchase Spanish carrier Air Europa.
International Airlines Group, the parent company of British Airways, Aer Linus, Vueling and Iberia, has signed an agreement to purchase Spanish carrier Air Europa for €1 billion cash.
The sale is expected to be completed in the second half of 2020, subject to regulatory approval.
Air Europa, with a fleet of 66 aircraft, operates domestic and international flights to 69 destinations worldwide.
The takeover is expected to give IAG a 26 per cent share in the Europe to Latin American market.
“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,” Chief Executive Willie Walsh said.
The Air Europa brand will be retained initially. However, over time, Air Europa will be integrated into the existing hub at Madrid.
Michael O’Leary, Ryanair chief executive, opposed the acquisition saying: “I think it’s a bad deal from a competition point of view.”
Should the deal fall through, IAG has agreed to pay Air Europa a break fee of €40m.
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