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IAG buys Air Europa for €500m …. paid in 2026

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This time last year, IAG, parent of BA and Iberia, announced its intention to acquire Air Europa. Air Europa is the third-largest airline in Spain, after Iberia and Vueling, operating around 15% of all Spanish domestic flights.

The hope was that the deal would create a ‘5th European hub’ in Madrid, bulking up the existing Iberia operation, to sit alongside London, Frankfurt, Paris and Amsterdam. You can read our original article on the plans here.

Air Europa 787

At the time, the going price was €1bn. Clearly a lot has changed since then, including the worst crisis aviation has ever seen.

IAG remains undeterred and has managed to negotiate a 50% discount on the purchase according to Spanish site El Confidencial and as reported by Reuters.

Better yet, IAG wouldn’t have to pay a penny until 2026! This gives IAG plenty of time to get €500m together with most forecasts suggesting that air travel will return to 2019 levels by 2024. IAG will also benefit from the €475m soft loan given to Air Europa by the Spanish Government.

We still need to know how IAG intends to address monopoly concerns in Spain, with the additional of Air Europa giving it dominance of the domestic market with 73%. Ryanair will be the biggest competitor but only has a 15% share.

Air Europa has a young fleet of Boeing 787, Airbus A330, Boeing 737 and Embraer 195 aircraft. The departure of the airline from the SkyTeam alliance seems like for a foregone conclusion.


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How to earn Avios from UK credit cards (May 2021)

As a reminder, there are various ways of earning Avios from UK credit cards.  Many cards also have generous sign-up bonuses.

There are two official British Airways American Express cards:

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Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

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(Want to earn more Avios?  Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)

Comments (43)

  • marcw says:

    Do not trust Elconfidencial – last month there was apparently a deal were IAG would buy Air Europa with shares. Now this.
    I wouldn’t be surprised if in 4 months the same journalist writes: “Spanish Government vetoes the transaction”

  • Geoff says:

    With T4 closed they appear to have suspended the T4-T3 train link, which makes the T4 hotels less useful for T2/3 access.

  • Anna says:

    My cancelled MAN-NCE flight in August is showing as now leaving from LHR T3. Hope the Cathay lounge is back open then!

  • RussellH says:

    Sorry, but the environmental issues notwithstanding, the thought of spending three hours in a cramped shorthaul seat twice in one day is far too much for me.

  • Ian_H says:

    Does anyone have any experience of whether the 6 Dragonpass Lounge visits with Barclays Travel Pack expire if not used or roll over to next year?

    Even when I’ve been travelling the lounges havent always been open and for the first time have an approaching anniversary date and unused visits).

    • John says:

      Asked Barclays about that but didn’t get a response. Intend to try again nearer my own expiration date. Maybe if enough of us request it, they’ll see if Dragonpass will extend. Not hugely inclined to renew if they don’t make some Covid gesture.

      • Ian_h says:

        Thanks John agree it makes sense to ask, dragonpass have been very reasonable in the past when I had an issue with a lounge so hopefully they will have a policy on this.

  • LaserBeams says:

    Totally off topic but if I remember mention sometime back of a website to buy foreign currency and they would transfer it into a foreign bank account. Avios were awarded based on the amount bought. Can someone please remind me of the company that offered this? Thanks!

  • Joe says:

    Fact check – if you are including the architect’s name please check it is correct. T5 was designed by Richard Rogers not N. Foster.

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