IAG once again abandons its plans for Air Europa

The IAG Group recently announced that it was abandoning its plans to acquire the Spanish airline Air Europa. This strategic about-turn has raised many questions about the future of this acquisition and its consequences for the aviation sector.

IAG abandons bid to acquire Air Europa's 80 remaining %s

The Group IAG announced on August 1 that it was abandoning its plans to acquire the 80 %s belonging to the Spanish company Air Europa which it did not already own. In a press release, the group indicated that, "in the current regulatory environment, it would not be in the best interests of shareholders to proceed with the transaction."

Reasons for withdrawal

The CEO of IAG, Luis GallegoHowever, the Group will retain its 20 % stake acquired in 2022. The European Commission expressed concern about the impact on the competition of this acquisition. To remedy the situation, IAG offered to sell up to 40 % of the flights operated by Air Europa in 2023. However, these concessions were not enough to move the case forward with the regulatory authorities.

IAG's initial ambitions

The main objective of this acquisition was to transform the Iberia hub in Madrid to make it competitive with other major European hubs. IAG also aimed to stimulate growth in Latin American, Caribbean and Asian markets. Despite the abandonment of this project, IAG is maintaining its strategy of developing the Madrid hub so that it can compete with Europe's biggest hubs.

A look back at IAG's attempts

This is not the first time that IAG has given up on taking full control of Air Europa. Already in 2021, in the midst of a health crisis, the group had to abandon a similar project. Once again, the reasons were partly linked to concerns about maintaining competition.

Compensation and financial results

As a result of the project's abandonment, compensation of 50 million euros was paid to the Spanish tourism group Globalia. This announcement was made during the presentation of the Group's half-year results. With sales up 8 1TP4Q to 14.7 billion euros, IAG's operating income improved slightly by 3.8 1TP4Q to 1.3 billion euros, and net income stood at 905 million euros. Thanks to constant demand and the implementation of a transformation plan, IAG is confident in its model and its future, even announcing the future payment of a dividend to its shareholders.

Summary of major events

Event	Detail
August 1, 2023	IAG announces that it will not acquire Air Europa's 80 remaining %s.
2022	IAG acquires a 20 % stake in Air Europa.
2021	IAG had already tried, but failed, to acquire Air Europa.
Compensation	50 million paid to Globalia following abandonment of the project.
Financial Results	Sales of 14.7 billion euros, with net income of 905 million euros.

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