Iberia steps on the accelerator to definitively close the purchase of Air Europa, valued at 500 million euros. The airline’s parent company, IAG, still needs approval from the European competition authorities, and for this it is willing to offer a greater transfer of flights to facilitate the operation.
The group formalized this Monday the purchase request before the European Commission with the aim that it can be completed as soon as possible during 2024. Among the arguments with which they seek approval from Brussels, IAG highlights that the offer of “remedies” (the measures that guarantee competition) “is significantly greater” than in its previous attempt. “We have worked closely with the European Commission since the announcement of the operation and we will propose an ambitious and comprehensive set of remedies after having heard their views,” commented Luis Gallego, president of the airline holding company.
From IAG they highlight that various companies have shown “a lot of interest in being awarded” the flight concessions that are released from the merger, “which shows the importance and viability of the package” of measures. Among the companies that want to qualify for these flight rights, Ryanair and Volotea stand out.
Both Iberia and IAG defend that the purchase of Air Europa will benefit users, the Barajas airport and Spain, since it will strengthen the country’s air power against European competitors. On the first point, they assure that despite there being one less operator, routes, frequencies and flexibility for travelers will increase, with 500 new combinations of origin and destination and strong growth in routes to Asia.
As for the Barajas airport, they emphasize that it will be able to compete with the large European hubs, such as Paris, Munich, Frankfurt and Amsterdam (all of them with a single reference airline). They estimate that Iberia and Air Europa together will have a share similar to that of the main European airlines in their hubs. It will be on par with Air France in Paris and will still be inferior to Lufthansa in Munich or KLM in Amsterdam. In total, they estimate that the merger will increase Madrid-Barajas traffic by at least 1.6 million passengers per year.
Now, the European Commission has a maximum of 35 working days to examine the purchase and, if it considers it appropriate, request more information from both IAG and other companies.
Now, given the size of the operation, it is very possible that Brussels will open a second phase of investigation to more carefully review everything provided and ensure that it respects the principles of competition. This second period could extend up to 110 business days.
