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IAG Acquires Full Control of Air Europa

An Air Europa 787-8 in Madrid (Photo: AirlineGeeks | William Derrickson)

International Airlines Group (IAG) has agreed to purchase the remaining 80% stake of Air Europa that it did not already own from Spanish company Globalia. In announcing strong financial results for 2022 and a positive outlook for 2023, IAG revealed that it had finalized an agreement to pay 400 million Euros ($422 million) to acquire full control of the Spanish airline.

The Acquisition

IAG is the holding company that owns Aer Lingus, British Airways, Iberia, LEVEL and Vueling. It first announced its intention to acquire Air Europa for one billion Euros in November of 2019. However, the deal was not finalized before the COVID-19 pandemic and the purchase price had dropped to 500 million euros by January of 2021. IAG later backed out of the deal before converting a loan to a 20% stake in Air Europa in August of 2022.

Payments to acquire the remaining 80% stake are structured as follows: 200 million Euros will be paid when the deal is approved by regulators. Once the deal closes, 100 million euros will be paid in IAG shares, and the final 100 million Euros will be paid in cash. The transaction is expected to be completed in about 18 months.

IAG intends to maintain Air Europa and Iberia as separate brands. Air Europa — which is currently a member of SkyTeam — is likely to leave the alliance to join British Airways and Iberia, to become a Oneworld member. However, it is unclear whether Air Europa will join the oneworld transatlantic joint venture.

Air Europa currently operates a fleet of approximately 40 aircraft, consisting of Boeing 737 and Boeing 787 Dreamliners. The carrier operates short-haul routes within Europe as well as long-haul transatlantic flights from its hub at Madrid’s Adolfo Suárez Madrid–Barajas Airport. Air Europa has a strong presence in Latin America and the proposed transaction would allow for IAG to strengthen its position in the region.

Market Consolidation and Regulatory Approvals

Since IAG already owns the two largest airlines in Spain, Vueling and Iberia, the acquisition of Air Europa would solidify the group’s dominance in the Spanish air travel market. The transaction has drawn the attention of regulators in the past and IAG has noted that the acquisition is subject to regulatory approval.

A previous iteration of the deal saw opposition from the European Commission, which stated that the proposed transaction could significantly reduce competition on 70 origin and destination city pairs. It further expressed concerns that existing competitors would not provide sufficient competition against IAG.

Nevertheless, IAG is optimistic about the deal, with Chief Executive Officer Luis Gallego stating that, “This acquisition will enable us to grow Madrid as a hub, offering a gateway to Latin America and beyond, with benefits for customers, employees and shareholders.”

Andrew Chen


  • Andrew Chen

    Andrew is a lifelong lover of aviation and travel. He has flown all over the world and is fascinated by the workings of the air travel industry. As a private pilot and glider pilot who has worked with airlines, airports and other industry stakeholders, he is always excited to share his passion for aviation with others. In addition to being a writer, he also hosts Flying Smarter, an educational travel podcast that explores the complex world of air travel to help listeners become better-informed and savvier travelers.

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