International Consolidated Airlines Group (IAG), the parent company of British Airways and Iberia, has formally sought antitrust approval from the European Union (EU) for its proposed acquisition of the entire stake in the Spanish low-cost airline Air Europa, reported Reuters.
IAG Chief Executive Luis Gallego expressed confidence in the deal’s potential benefits for consumers, the Spanish economy, and the competitiveness of Madrid as an aviation hub. In a statement released on Monday, Gallego stated, “We have notified our proposed acquisition of Air Europa to the European Commission today. The deal will deliver benefits for consumers and the wider Spanish economy, as well as improve Madrid’s competitiveness with other European hubs.”
The acquisition plan, announced in February, involves IAG acquiring the remaining 80% of Air Europa from Spain’s Globalia for a sum of 400 million euros ($429.80 million). IAG already owned a portion of Air Europa before this agreement.
To address concerns raised by the European Commission regarding potential antitrust issues, IAG has pledged to offer an ambitious and comprehensive set of remedies. The company aims to address competition concerns and expedite the approval process to close the transaction in 2024.
It is customary in airline mergers to make concessions to regulators, often involving the divestment of airport slots and providing access to loyalty programs. IAG has indicated that it will explore discussions with various rivals, both within and outside the EU, to gauge their interest in the proposed remedies.
The acquisition of Air Europa is expected to strengthen IAG’s position in the European market and potentially lead to enhanced connectivity for passengers. However, regulatory scrutiny remains a critical aspect of such deals, with the European Commission keenly assessing the potential impact on competition and market dynamics.