EU Antitrust Warning Looms Over IAG’s Bid for Air Europa

Sources familiar with the matter have revealed that British Airways owner International Airlines Group (IAG) is likely to face an antitrust warning from the European Union regarding its 400-million-euro bid to acquire Air Europa. The bid, valued at approximately $434 million, has raised concerns among regulators, indicating that IAG may need to enhance its proposed remedies.

IAG, which also holds ownership of Spanish carrier Iberia, submitted concessions on February 23 in an attempt to address competition issues. However, the specifics of these concessions were not disclosed.

The European Commission had previously voiced apprehensions in January, suggesting that the acquisition could potentially reduce competition on various routes, including Spanish domestic flights to popular tourist destinations like the Balearic and Canary Islands, as well as short-haul routes connecting Madrid to key European cities, Israel, Morocco, Britain, and Switzerland, reported Reuters.

Read more: British Airways Owner IAG To Buy Air Europa

Moreover, concerns were also raised regarding long-haul routes between Madrid and destinations in North and South America. To avert the issuance of a formal statement of objections from the EU competition watchdog, IAG has the opportunity to augment its proposed remedies within the upcoming days.

According to insiders, IAG’s proposed remedies bear similarities to those implemented in the Korean Air-Asiana deal. In that instance, South Korean carriers relinquished slots, traffic rights, and access to aircraft in response to demands from EU regulators.

This isn’t the first time IAG and Air Europa have pursued a merger. A previous attempt in 2021 was abandoned after EU regulators deemed the remedies insufficient to allay competition concerns.

Source: Reuters