International Consolidated Airlines Group (IAG), the parent company of Iberia and British Airways, has agreed to buy Spanish airline Air Europa from Globalia for €1 billion.
In a statement to the stock exchange, IAG said Air Europa, which operates flights to 69 destinations on 66 aircraft, would boost its presence on the South American transatlantic market and help Madrid compete with Frankfurt, Amsterdam, Paris Charles de Gaulle and London Heathrow.
The deal also means IAG would dominate the Spanish domestic market. Iberia, Vueling and Air Europa collectively account for 84 percent of domestic seats, according to the Centre for Aviation (CAPA).
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, said, “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, said, “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.”
