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.
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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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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