Tuesday, 5 November 2019

Air Europa sold to IAG's Iberia for €1 billion

International Consolidated Airlines Group - IAG confirmed on Monday that it had reached a deal with Globalia for Iberia to acquire the entire issued share capital of Air Europa for €1 billion.

Air Europa is one of the leading private airlines in Spain, operating scheduled domestic and international flights to 69 destinations, including European and long-haul routes to Latin America, the United States of America, the Caribbean and North Africa. In 2018, Air Europa generated revenue of €2.1 billion and an operating profit of €100 million. It carried 11.8 million passengers in 2018 and ended the year with a fleet of 66 aircraft.

The deal will totally transform Madrid for Iberia, making it one of the key European hubs, to rival Paris Charles de Gaulle. Amsterdam's Schiphol and London's Heathrow.  It will also allow Iberia to re-establish itself and the group in Latin America and the Caribbean and create opportunities for network growth in the South Atlantic.

Javier Hidalgo, Chief Executive of Globalia, said: “For Globalia, the incorporation of Air Europa to IAG implies the strengthening of the company’s present and future that will maintain the path followed by Air Europa in the last years. We are convinced that the incorporation of Air Europa to a group such as IAG, who over all these years has demonstrated its support to the development of airlines within the group and the Madrid hub, will be a success”.

Luis Gallego, Chief Executive of Iberia, said: “This is of strategic importance for the Madrid hub, which in recent years has lagged behind other European hubs. Following this agreement, Madrid will be able to compete with other European hubs on equal terms with a better position on Europe to Latin America routes and the possibility to become a gateway between Asia and Latin America.”

“Acquiring Air Europa would add a new competitive, cost-effective airline to IAG, consolidating Madrid as a leading European hub and resulting in IAG achieving South Atlantic leadership, therefore generating additional financial value for our shareholders,” said IAG chief executive Willie Walsh.

The Air Europa brand will initially be retained and the company will remain as a standalone profit centre within Iberia run by Iberia CEO Luis Gallego. 

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