On Thursday, IAG, the parent company of British Airways and Iberia, announced that it has abandoned its bid to acquire Spain's Air Europa due to regulatory concerns. The decision follows an in-depth investigation by the European Commission, which had raised concerns about reduced competition on various routes.
(Image Source)
IAGOn Thursday, IAG, the parent company of British Airways and Iberia, announced that it has abandoned its bid to acquire Spain’s Air Europa due to regulatory concerns. The decision follows an in-depth investigation by the European Commission, which had raised concerns about reduced competition on various routes.
(Image Source)
Image: Air Europe
IAG, which also owns Vueling and Aer Lingus, had planned to purchase Air Europa for 500 million euros from Globalia, contingent on regulatory approval. However, IAG’s board decided it was not in the best interest of shareholders to proceed with the acquisition under the current regulatory conditions.
In a separate announcement, IAG reported a 3.9 percent increase in first-half operating profit to 1.3 billion euros, along with its first dividend payment since the onset of the Covid pandemic. The company also saw an 8.4 percent rise in revenues to 14.7 billion euros.
IAG’s CEO, Luis Gallego, highlighted strong travel demand in their key markets and expressed confidence in the company’s performance and transformation. Despite the canceled acquisition, IAG remains committed to its strategy and plans to continue competing from its Madrid hub.
The European Commission had expressed concerns about the impact on competition on domestic routes and long-haul connections from Madrid. Although IAG had offered to divest 40 percent of Air Europa’s routes to address these concerns, it decided to retain its 20 percent stake in Air Europa and pay Globalia 50 million euros to terminate the deal.
Source: IAG
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