Globalia, parent company of Air Europa, and International Airlines Group (IAG) have reached an agreement for the sale of Air Europa’s airline division. The deal involves IAG acquiring the remaining 80 per cent of Air Europa for €400 million. IAG had previously paid 100 million euros for 20 percent of Air Europa, bringing the total deal to 500 million euros for the company’s equity.
Once the approval of the competition authorities is received, the first payment of 200 million euros will be made, 100 million in cash and 100 million in IAG shares (at the price fixed at the signing of this agreement), which will make Globalia one of the main shareholders of the IAG group.
The other two payments, of 100 million euros each, will be made on the first and second anniversary, respectively, of the approval of the acquisition.
The deal is subject to approval by competition authorities, as well as SEPI and ICOS, which may take up to 18 months after receipt of the relevant approvals. It also provides for a EUR 50 million break-up fee in case the acquisition cannot be completed.
Air Europa and its Latin American market
IAG’s objective is to strengthen its presence in Latin America and the Caribbean, using Madrid-Barajas as a strategic hub for connectivity with Europe. Air Europa has a wide network of destinations and a solid presence and recognition, establishing, in turn, a solid link from the American continent.
According to a statement from IAG, this will allow Spain to compete on equal terms with other European hubs, such as Lufthansa’s Frankfurt and Air France/KLM’s Amsterdam and Paris.
Jesús Nuño de La Rosa, CEO of Air Europa Holding, said that «the agreement reached with IAG endorses the success of the plan carried out to consolidate Air Europa as an international benchmark after the pandemic, demonstrating its viability and good work, before and after the biggest crisis in the aviation sector».
In addition, the Latin American and Caribbean market will gain access to new destinations in Asia and the Middle East once the transaction is approved.
In 2019 Air Europa carried 13.1 million passengers. In 2022 it recovered 76% of its traffic by carrying 10 million passengers. Air Europa has been gradually rebuilding its Latin American network over the past year. According to data compiled by Aviacionline via Cirium, seat capacity during January 2023 was just 2% below that of the same month in 2020.
Puerto Iguazú, Recife and Fortaleza are the only destinations that Air Europa has not yet resumed in Latin America and the Caribbean.
With an offer of 250,000 seats per month, Air Europa is responsible for 25% of the capacity between Spain and Latin America and the Caribbean, ranking second behind Iberia with 39% and ahead of Avianca with 9%.
