International Airlines Group reaches deal to buy Air Europa for $1.1 billion

Nov 4, 2019

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

International Airlines Group, the parent company of British Airways and Iberia, among others, has added another airline to its portfolio. Monday morning, the group announced that it had reached a deal to purchase Air Europa, strengthening the group’s presence in Madrid with goals of making the airport the next European hub.

According to a press release, IAG’s wholly owned subsidiary Iberia has acquired Air Europa under the IAG umbrella. The cash deal, worth 1 billion euro ($1.1 billion), was agreed to between IAG and tourism company Globalia Corp.

Air Europa is currently part of SkyTeam, the global airline alliance which includes Air France-KLM and Delta Air Lines. IAG carriers are in the rival Oneworld alliance, which makes an alliance switch for Air Europa all but certain when the deal is finalized.

The deal allows IAG to continue its growth strategy in Spain. Already owning the flag carrier of the country, Iberia, as well as low-cost carriers Vueling and LEVEL, IAG has a strong hold on the Spanish market. The group plans to use the Madrid hub to increase its presence on the Europe to Latin America and Caribbean routes.

“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,” IAG CEO Willie Walsh said in a statement.

The deal is expected to be completed in the second half of 2020, following government approvals.

IAG turned to Spain for growth opportunities given the limitations at its London Heathrow hub. With Air Europa’s existing route network to Latin America and the Caribbean, IAG believes that Madrid is set to become Europe’s next hub airport, joining the likes of Amsterdam, Frankfurt, Paris and London Heathrow.

In 2018, Air Europa generated 2.1 billion euro ($2.4 billion) in revenue and 100 million euro ($112 million) in operating profit. In the year, it carried 11.8 million passengers on its fleet of 66 aircraft. For long-haul routes, Air Europa operates both Boeing 787 Dreamliners and Airbus A330s.

Business class on Air Europa's 787. (Photo by Nick Ellis/The Points Guy)
Business class on Air Europa’s 787. (Photo by Nick Ellis/The Points Guy)

“We continue to believe there is scope for further consolidation within Europe, and this is the next step,” Walsh said.

Initially, IAG will retain the Air Europa brand and it will be run as a standalone part of Iberia. However, in the future, Walsh said that the group will reduce the number of brand names that it operates in Spain.

After completion of the Air Europa deal, IAG will own six commercial airlines: Aer Lingus, British Airways, Iberia, LEVEL, Vueling and Air Europa.

Featured photo by Fabrizio Gandolfo/SOPA Images/Getty Images.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases within the first three months of card membership. Plus, earn a $200 statement credit after your first Delta purchase within the first three months. Offer ends 7/28/21.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles after spending $3,000 in purchases on your new Card in your first 3 months and a $200 statement credit after you make a Delta purchase with your new Card within your first 3 months. Offer expires 7/28/2021.
  • Limited Time Offer: Plus, get a 0% intro APR on purchases for 12 months from the date of account opening, then a variable 15.74%-24.74%. Offer expires 7/28/2021.
  • Accelerate your path to Medallion Status, with Status Boost®. Plus, in 2021 you can earn even more bonus Medallion® Qualification Miles (MQMs) to help you reach Medallion Status.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
0% on purchases for 12 months
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.