Tails of all IAG Airlines

Brussels Plays the Waiting Game: Iberia-Air Europa Merger Deadline Extended

The European Commission has extended the deadline for deciding on the Iberia and Air Europa merger until August 20. This new date provides more time to evaluate the latest concessions offered by Iberia, the parent company IAG.

IAG submitted additional proposals to the Commission on Monday. These adjustments aim to ensure that the merger benefits consumers. They result from ongoing constructive dialogue between IAG and the Commission.

Back in May, IAG CEO Luis Gallego confirmed that six airlines were proposed to take over routes that might be surrendered. These airlines include Avianca, Binter, Iberojet, Ryanair, Volotea, and World to Fly. This step aims to maintain competition in the airline market.

IAG has indicated willingness to cede up to 40% of Air Europa’s routes if required. The new concessions led to an automatic 15-day extension of the decision deadline. An additional 10 working days were agreed upon, making August 20 the new target date for the final decision.

The Commission’s review process can include pauses if more information is needed. This is common in complex transactions.

These route concessions are crucial for the deal’s approval. The specifics of the routes to be ceded have not been disclosed. However, they aim to prevent a concentration of market power and ensure competitive pricing and service quality.

Parked Iberia aircraft and its cabin crew

The original agreement between Iberia and Air Europa dates back over four years. Initially, the deal was worth 1 billion euros but was later reduced to 500 million euros due to the pandemic. The current proposal involves IAG acquiring the remaining 80% of Air Europa’s capital for 400 million euros.

The Commission’s main concern is the potential impact on long-haul routes between Madrid and North and South America. They also worry about routes connecting Spain’s islands and certain European destinations.

This extension provides more time to address these concerns. The aviation industry awaits the final decision, which will shape the future of air travel in the region.

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