IAG boss says Air Europa deal will take at least 18 months
The IAG – Air Europa deal will not be finalised for at least 18 months, IAG’s chief executive Luis Gallego said this morning.
“We have to decide on a calendar to take 100 per cent, but I think it would take minimum 18 months,” said Gallego, adding that the company will need to secure anti trust approval in several countries.
Gallego’s comments come a few weeks after the aviation giant – who owns amongst others British Airways and Vueling – offered a €100m unsecured loan to rival Globalia in exchange for a 20 per cent stake in the carrier.
“This agreement will give us time to evaluate with exclusivity alternative structures that may be of interest to both companies and offer significant benefits for their customers, employees and shareholders,” Gallego said on 17 March.
The Air Europa deal hit a bump in December when IAG was forced to pay €75m to Globalia after it backed out of a €500m takeover as a result of the pandemic’s impact on the group finances, Morning Wire reported.
Initially announced in 2019, the takeover was also plagued by competition concerns raised both at the EU and UK level.
For the UK’s Competition and Markets Authority (CMA) concerns applied in particular to the London-Madrid market, as a possible takeover would leave Ryanair and Easyjet with a fraction of the market.
“An expanded IAG group to include Air Europa, could see IAG’s market share increase further to 76 per cent, though it is possible that other carriers in the market would try and alter capacity offered in response to such a takeover, assuming there are slots available allowing them to expand, which at Heathrow and Madrid particularly might pose a problem for non-IAG carriers,” David Warnock-Smith, professor of aviation management told Morning Wire in December.