IAG agrees to purchase Air Europa for half of what it offered 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.
On Tuesday, International Airlines Group (IAG) finalized an amendment to the original purchase agreement for Air Europa.
IAG-owned Iberia has been given the go-ahead to acquire Air Europa for €500 million — half of the 2019 equity value of €1 billion. IAG also detailed that it will not make the final payment until six years after the acquisition.
Sign up to receive the daily TPG newsletter for more airline news!
However, before the sale can officially go ahead, Iberia must finalize negotiations with the Sociedad Estatal de Participaciones Industriales (SEPI) — a Spanish state-owned sovereign wealth fund. The negotiations will be centered around the non-financial terms associated with the financial support that SEPI provided to Air Europe throughout the turbulent year of 2020.
IAG expects the completion of the deal to take place in the latter half of 2021, around the time when the recovery of air travel is hoped to be well underway.
“Both Iberia and IAG are demonstrating their resilience to face the deepest crisis in aviation’s history,” IAG CEO Luis Gallego said in a statement. “Being part of a large group is the best guarantee to overcome current market challenges which will also benefit Air Europa once the transaction is completed. I am pleased that we have reached agreement with Globalia [the owners of Air Europa] to defer payment until well into the expected recovery in air travel following the end of the pandemic and when we expect to be realizing significant synergies resulting from the transaction.”
IAG hopes that with the incorporation of Air Europa, it will bolster its presence at Madrid Barajas Airport (MAD). With the expanded route network as a result of the acquisition, IAG hopes that MAD can become a competitor with other European hub airports like Amsterdam, Frankfurt and Paris.
“This transaction makes perfect strategic sense to reinforce Madrid’s hub competitiveness on a global stage,” said Iberia CEO Javier Sánchez-Prieto. “It will benefit consumers and Air Europa’s incorporation into the Iberia Group will improve the company’s viability benefitting both Iberia and Air Europa employees.”
Additionally, with Air Europa as part of the IAG umbrella, passengers will have better opportunities to earn and redeem miles. Iberia uses Avios as its currency — the same that fellow IAG airlines British Airways and Aer Lingus use.
Related: How to transfer your Avios between British Airways, Iberia and Aer Lingus accounts
Air Europa is Spain’s third-largest airline after Iberia and Vueling, and is based out of Palma on the Balearic island of Mallorca. Currently, Air Europa is a member of SkyTeam, though it will likely switch to rival airline alliance Oneworld with IAG-owned airlines such as British Airways and Iberia.
Related: Surprise and (mostly) delight: Across the Atlantic in business class on Air Europa’s 787-9
Featured image by SOPA Images/Getty
Sign-up Successful!
Welcome to The Points Guy!
WELCOME OFFER: 60,000 Points
TPG'S BONUS VALUATION*: $1,200
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases.
- 2X points on dining at restaurants including eligible delivery services, takeout and dining out and travel & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.
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.
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.