IAG Looks to Latin America With Air Europa Purchase
Iberia parent IAG has agreed to buy Spanish carrier Air Europa for EUR€1 billion (USD$1.1 billion) to boost its presence on Latin American and Caribbean routes.
IAG said the acquisition will also transform Madrid’s Barajas airport into a rival to Europe’s four largest hubs - Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle.
The all-cash offer is expected to complete in the second half of 2020, subject to approvals.
IAG chief executive Willie Walsh said of the deal, “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.”
The Air Europa brand will be retained initially as a standalone entity within Iberia and run by CEO Luis Gallego.
“Following this agreement, Madrid will be able to compete with other European hubs on equal terms with a better position on Europe to Latin America routes and the possibility to become a gateway between Asia and Latin America,” Iberia’s Gallego said.
Air Europa operates scheduled domestic and international flights to 69 destinations in Europe, Latin America, the United States, the Caribbean and North Africa. It carried 11.8 million passengers in 2018 on a fleet of 66 aircraft.