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EU May Warn IAG Over Air Europa Bid

 |  February 22, 2024

European Union competition regulators are poised to issue a warning to International Airlines Group (IAG), the parent company of Aer Lingus and British Airways, regarding its €400 million bid to acquire Air Europa. The warning could materialize in the coming months if IAG fails to propose remedies to address antitrust concerns, according to a source familiar with the situation.

Last month, the European Commission launched a comprehensive investigation into the proposed acquisition, expressing apprehensions that it could diminish competition on various fronts. These include domestic routes to popular tourist destinations such as the Balearic and Canary Islands, as well as short-haul routes connecting Madrid with key European cities, Israel, Morocco, Britain, and Switzerland.

While the EU competition watchdog refrained from commenting further on the matter, it hinted at potential ramifications for long-haul routes between Madrid and North and South America due to reduced competition. IAG’s ownership of Spanish carriers Iberia and Vueling adds complexity to the regulatory scrutiny.

If IAG fails to provide satisfactory remedies, it could face a formal charge sheet known as a statement of objections outlining the Commission’s reservations about the deal. This development may unfold in the coming weeks, the insider revealed.

Luis Gallego, CEO of IAG, has previously signaled the company’s willingness to address EU concerns by offering remedies. Gallego mentioned ongoing discussions with potential entities willing to adopt these measures. IAG’s objective is to acquire the remaining 80% stake in Air Europa from Spain’s Globalia.

This isn’t the first time the deal has faced regulatory hurdles. In 2021, the proposed acquisition was abandoned after EU regulators indicated that the remedies proposed at the time were insufficient to alleviate competition concerns.

As the aviation industry navigates through turbulent times exacerbated by the pandemic, regulatory scrutiny intensifies, underscoring the importance of maintaining competitive landscapes in key markets. The outcome of IAG’s bid for Air Europa remains uncertain pending further developments in the ongoing investigation.

Source: Irish Examiner