Air Europa Is Sold To IAG Group, Takeover To Be Completed Within 18 Months

Air Europa Is Sold To IAG Group, Takeover To Be Completed Within 18 Months

The International Airlines Group or IAG, the owner of British Airways and Iberia will be acquiring Spain’s Air Europa after a years-long ordeal.

IAG Will Be Fully Acquiring Air Europa Within 18 Months

Before explaining the takeover, the International Airlines Group (IAG) is one of the world’s largest airline groups formed in January 2011 after a merger agreement between British Airways and Iberia. The group is now the parent company of Aer Lingus, Vueling, and LEVEL as well.

Back in November 2019, IAG opened an interest to purchase Air Europa for 1 billion Euros and this is to grow the Madrid hub to compete with major European markets. IAG already bought 20% of Air Europa’s stakes for 100 million Euros however the acquisition was not completed due to the pandemic and faced concerns from the European Commission which might reduce competition in Spain.

In a filing made by the group yesterday, it will be purchasing the remaining 80% of Air Europa’s stake for 400 million Euros with structured payments. It is finally, after four years of deal changes and even after pulling out of the deal, the group has finalized the deal.

How Will IAG Make The Payment

As mentioned above, IAG will be paying the remaining 80% of stakes with structured payments. The remaining 400 million Euros will be paid in three separate times:

  • The 200 million Euros will be paid when the deal closes, which is expected in 18 months.
  • 100 million Euros will be paid by IAG’s shares.
  • Another 100 million Euros will be paid in cash one or two years after the deal closes.

Per Reuters, IAG said the deal will allow it to improve its position in the Latin American market and expand into Asia, while allowing its Madrid hub to compete with other major airports in Europe. It also added that the acquisition will allow it to achieve significant cost cuts that it expects to bear fruit between 2026 and 2028 if the deal is finalized in the next 18 months.

Air Europa To Keep Its Brand

With the takeover, IAG will become managed by Iberia but will maintain its brand. Air Europa currently has 50 aircraft in its fleet and an additional 15 in order (B787-9s and B737 MAX) that will be delivered between 2024 to 2026.

The airline is currently a SkyTeam alliance member but once it is sold to IAG, it will leave the alliance and join Oneworld as a transatlantic joint venture. Also, it would be most probable that the airline’s frequent flyer program will adopt Avios as currency.


Yesterday, IAG made a filing that the group will be purchasing the remaining 80% of Air Europa’s stakes from Globalia for 400 million Euros. The takeover will be taking at least 18 months and the details of the terms are now out.

This will create IAG to dominate the Spanish market where the top three Spanish airlines are under IAG. However, since the European Commission and UK’s Competition and Market Authority are still showing concerns, it is still unclear how the acquisition will be finalized.

Leave a Reply

Your email address will not be published. Required fields are marked *

A note to our visitors

This website has updated its privacy policy in compliance with changes to European Union data protection law, for all members globally. We’ve also updated our Privacy Policy to give you more information about your rights and responsibilities with respect to your privacy and personal information. Please read this to review the updates about which cookies we use and what information we collect on our site. By continuing to use this site, you are agreeing to our updated privacy policy.