Air Europa has repaid its pandemic-era government aid one year ahead of schedule after securing a €300 million investment from Turkish Airlines, marking a significant financial and strategic shift for the Spanish carrier. The agreement gives Turkish Airlines an approximately 26% stake in Air Europa through a convertible loan, pending regulatory approvals.
The deal, which values Air Europa at around €1.175 billion, strengthens its balance sheet and positions the airline for future growth alongside existing stakeholders Globalia and International Airlines Group (IAG). The fresh capital will enable the carrier to complete repayment of state-backed loans from Spain’s Sociedad Estatal de Participaciones Industriales (SEPI), totaling nearly €500 million including interest.
Air Europa clears SEPI debt early
Air Europa confirmed that with the new funding and internal resources, it has fully repaid both ordinary and participative loans granted under the SEPI’s Fondo de Apoyo a la Solvencia de Empresas Estratégicas (FASEE), along with accrued interest. The state holding company said the airline’s payment of €475 million covers the principal and interest, officially closing the temporary support package extended during the COVID-19 crisis.
The SEPI noted that the repayment came a year earlier than expected, increasing the total reimbursements received by the FASEE to €1.425 billion — 53% of the €2.681 billion allocated to support strategic firms affected by the pandemic. Other beneficiaries that have settled their debts include Ávoris, Eurodivisas, Wamos, Rugui Steel, Ferroatlántica, Soho, Hesperia, and Hotusa.
“After settling, last May, the €141 million bank loan with its corresponding interest — obtained in May 2020 with participation and guarantee from the Instituto de Crédito Oficial (ICO) — Air Europa now closes an important stage in its financial deleveraging process, confirming the success of its management strategy,” said Air Europa in a statement.
Strategic alliance with Turkish Airlines
The investment from Turkish Airlines marks a new phase for Air Europa, long considered a key player in Spain’s connectivity between Europe and Latin America. Negotiations for the deal began before the summer, with Turkish Airlines submitting a binding offer during the period, culminating in the structuring of the transaction now awaiting regulatory and competition approvals.
The Turkish carrier will join Globalia, which retains majority ownership through the Hidalgo family, and IAG, which maintains its existing 20% share acquired from Globalia. Air Europa described the agreement as “an important milestone” for the commercial aviation sector, bringing together three major players under a shared equity structure.
The company emphasized that the €475 million SEPI loan had been essential to ensuring full recovery of operations after the pandemic while also generating a positive economic return for Spain. The airline said the funds enabled it not only to maintain around 4,000 jobs but also to create more than 600 additional positions, bringing total employment to approximately 4,600 staff.
Air Europa added that over the course of the loan period, it paid the state roughly €70,000 per day in interest, amounting to more than €97.2 million in total — equivalent to a 20% premium above the principal amount borrowed. The early repayment underscores the company’s improved liquidity and its progress in restoring financial stability following years of restructuring.
“This operation provides immediate funding while awaiting regulatory and competition clearances,” the airline said, adding that it marks a decisive step in consolidating Air Europa’s position in the European aviation landscape alongside Turkish Airlines and IAG.
The transaction also deepens Turkish Airlines’ footprint in Southern Europe, giving it direct access to one of the region’s most important carriers for transatlantic routes. For Air Europa, the deal is expected to enhance its long-haul network and operational flexibility as part of its long-term recovery strategy.
Air Europa’s management said the combination of new capital, debt repayment, and strategic partnerships represents a turning point for the company after years of pandemic-related financial strain, placing it among Europe’s more resilient mid-sized carriers.
