Madrid approves Iberia’s acquisition of 20% of Air Europa

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Iberia (IB, Madrid Barajas) will acquire 20% of Air Europa (UX, Palma de Mallorca) by the end of 2022, and “the next step is to try to get 100% of the business”, said the CEO of Iberia, Javier Sánchez-Prieto. said after receiving state approval for the 100 million euro ($104 million) convertible loan from parent company IAG International Airlines Group to Globalia, the parent company of Air Europa.

The public credit institution (Instituto de Crédito Oficial – ICO) and the sovereign wealth fund (Sociedad Estatal de Participaciones Industriales – SEPI) have agreed to the loan that IAG promised Globalia in March to eventually convert into a stake of 20% in the struggling airline. . In May, IAG CEO Luis Gallego said he expected the loan to be converted to equity within six months.

The next step is to obtain authorizations from the competition authorities of three countries, Sánchez-Prieto told a press conference in the American capital on the occasion of the inauguration of a road between Madrid Barajas and Washington. Dulles, Spanish news agency EFE reported.

These authorities are Spain, Germany and the United Kingdom, for which Air Europa operates and which now have six months to approve the conversion of the loan.

Sánchez-Prieto pointed out that the 20% stake is a financial investment by Iberia and IAG that will not, for the time being, give them influence in the management of Air Europa. The idea is, he added, to continue working with Globalia, with the competition authorities and with SEPI to become 100% owner of the company. The chief executive has also pledged to return to its own profitability in 2022.

Separately, IAG CEO Luis Gallego told a business event hosted by Expansion newspaper in Alcalá de Henares in Spain last week that the Iberia-Air Europa merger would create a fleet of around 70 long-haul aircraft “like KLM Royal Dutch Airlines at Amsterdam Schiphol” in the capital’s Barajas center. Such a fleet will bring more destinations around the world to the hub and allow more vision to Asia,” one regions that will have the most development in the future”, he predicted.

IAG (Aer Lingus, British Airways, Iberia, LEVEL and Vueling Airlines) will reach around 85% of 2019 capacity this summer, he said, and in general capacity across the North Atlantic will reach the figures of before the pandemic. The group has not been affected by the closure of Russian airspace and the war in Ukraine, he added, since only 8% of its supply is directed to Asia.