IAG has proposed six airlines to the EC to take over the routes they have to give up to finally close the purchase of Air Europa. The companies that have formally shown their interest and are in talks with are Ryanair, Volotea and Binter for short flights and the Spanish Iberojet and World2Fly and the Colombian Avianca for long-haul flights.
The CEO of IAG, Luis Gallego, explained this Friday during the presentation of first quarter results that the conversation with these airlines is open and he has expressed confidence that the proposal will convince Brussels. Two weeks ago, the Commission published a document of “objections” to the operation that seeks the merger of the Globalia airline with Iberia. Brussels considered that the initial plan proposed by the buyer may have adverse effects on competition on several routes, both between Europe and Latin America and on flights between the peninsula and the Balearic and Canary Islands. This, the EC concluded, could harm consumers through an increase in the price of airline tickets.
Now, IAG considers that these airlines could take over 40% of the routes that Air Europa operated last year and that they are an essential part of its offer to facilitate the operation, which has been in process for five years, pandemic through.
The president of IAG has not specified the routes for which each of these airlines would apply, beyond the fact that half operate only short and medium long flights and the rest operate intercontinental flights. Ryanair has already expressed its desire to take flight rights (slots) in Madrid, Barcelona, ??the Balearic Islands and the Canary Islands. Volotea, which is attempting to go public, has stated that it does not have a preference for some routes or others or for specific destinations, although they are “ready” to cover all short and medium-haul routes determined by the Commission. In particular, they are interested in the slots that can be released in Madrid and in connections from the Peninsula to the islands.
IAG has until June 15 to submit to the EC all the information required for this operation, but the body has the ability to apply the ‘stop the clock’ mechanism if it needs to collect additional data.
Gallego added that they will continue working with the EC with the aim of reaching a “balanced” agreement that “sufficiently protects competition” and allows Madrid-Barajas to become “the great hub in southern Europe that it should be.”
IAG recorded losses after taxes of 4 million euros in the first quarter of 2024. Thus, it cuts the red numbers compared to the same period of the previous year, when it left 87 million. Iberia and British Airways have been the airlines that have improved the group’s results, with high operating profits. Vueling and Aer Lingus, although they cut losses, remain in the red in the first quarter.
