Anglo-Spanish multinational bid for Air Europa 

For the second time, the International Airlines Group (IAG) has approached the European Commission, seeking to expand its operations in a bid for Air Europa.

In a bold move towards consolidating its aviation empire, the International Airlines Group (IAG), the powerhouse behind Iberia, British Airways, Vueling, Aer Lingus and Level, has once again approached the European Commission, seeking approval for its acquisition of Air Europa.

The proposal was lodged on February 23, marking IAG’s renewed efforts after their initial bid was withdrawn during the turmoil of the 2021 pandemic.

Regulatory Hurdles and Strategic Remedies

The inquiry into this merger by the European watchdog was triggered a month prior to the submission, spotlighting potential competitive concerns. With a deadline of June 7 for its decision, the Commission’s scrutiny will focus on whether IAG’s latest proposals sufficiently mitigate the feared repercussions on service quality and fare prices.

Brussels’ apprehensions primarily revolve around the merger’s impact on long-haul flights from Madrid to the Americas, a sector where competition is notably sparse.

Market Concerns and Strategic Divestments

Brussels has also raised flags over national routes within Spain, particularly those lacking high-speed train alternatives, and connections to the Balearic and Canary Islands.

The concern extends to European short-hauls, highlighting direct services to key cities across the UK, Switzerland, Israel, and Morocco. IAG’s ambition extends to securing 80 per cent of Air Europa for €400 million, a strategic move aimed at strengthening its position on these contentious routes.

In a strategy to allay regulatory fears, IAG emphasizes its improved concession package, asserting that the divestiture of certain routes has attracted several potential buyers. This approach marks a strategic pivot from the failed first attempt, underscoring the group’s commitment to overcoming the regulatory barriers that thwarted their initial merger plans.

The re-crafting of a second bid not only illustrates IAG’s determination to expand its footprint but also highlights the intricate balance between growth ambitions and regulatory compliance in the global aviation industry.