Partial brake, although expected, on the purchase of Air Europa by IAG. The European Commission has today published its “objections” document to the operation that seeks the merger of the Globalia airline with Iberia. Brussels’ conclusion is that the initial plan proposed by the buyer may have adverse effects on competition on several routes, both internal to Spain and to Europe and Latin America, and that the traveler could suffer an increase in ticket prices.
The European Commission questions the first approach presented to it by IAG because, by absorbing Air Europa, there would be a reduction in the number of airlines that would operate on the current routes of both companies and this, therefore, would negatively affect competition.
The operation, which is key to promoting the Madrid-Barajas airport as a connection center with Latin America, is not going into a spin, however. From now on, a new negotiation is underway for the European Commission to evaluate the so-called “remedies”, that is, the solutions that IAG has proposed so that the acquisition of Air Europa does not cause such damage to competition in the sector.
IAG was counting on these objections from the community authorities, say sources from the company, which is confident that its route transfer approach will pass the approval of Brussels in the coming months. The schedule with which the airline group is working is to have the operation closed by the second half of 2024.
“Our proposal is very solid and we believe that it will respond to all the Commission’s concerns,” add IAG sources. The new president of Iberia, Marco Sansavini, already assured a few weeks ago that his airline is considering transferring 40% of the flights that Air Europa operated to other competitors in 2023. In this way, IAG commits to Brussels that no route is operated exclusively by Iberia and Air Europa.
IAG is willing to expand this package and give up more routes of the aforementioned 40% of Air Europa flights to its competitors, the company adds. The airline group led by Luis Gallego has advanced conversations with several competitors that are interested in taking on routes released by the future merger, both for short and long distance routes.
“We continue working with the Commission to bring together positions and agree on a definitive solution that allows this fundamental operation to be carried out to boost connectivity and the economy of Spain with all the guarantees for consumers,” defends IAG.
The airline group that owns Iberia and Vueling has guaranteed the Commission that if it receives the go-ahead to buy Air Europa “competition will be guaranteed.” It has even opened up to giving competitors “everything they need to launch the assigned routes and maintain a competitive service,” the company says. “Only healthy competition between the hubs of southern and northern Europe and the consolidation of aviation on our continent will allow Europe to compete on equal terms with North America, Asia and the Gulf countries,” concludes IAG.
