Wow: IAG, Iberia Acquiring Air Europa For €1 Billion Cash…

Air Europa will become a part of the IAG Group of airlines, including Aer Lingus, British Airways, Iberia and more, in a blockbuster €1 billion cash sale of the Spanish airline. The move is a major play toward grabbing marketshare for Iberia and IAG in Madrid, where the national carrier has below average slot control, versus airlines like British Airways at Heathrow, or Lufthansa at Frankfurt. Though the brands will be maintained in the interim, Iberia will grow by a whopping 50% when the sale completes…

Spanish newspaper El Espanol reports that the deal will close in the second half of 2020, and in the interim, the airlines will compete as normal. The announcement is a huge shake up to the status quo in Europe, with Air Europa presently featuring as a key SkyTeam alliance airline. There’s virtually no chance that will remain the case once the sale completes, thus turning Madrid into a Oneworld dominated city, and another airline on the Avios loyalty currency.

If it all sounds a bit unclear, here’s a clip from the IAG press release…

“The company will remain as a standalone profit centre within Iberia run by Iberia CEO Luis Gallego. Commercial links will be formed between Air Europa and other IAG operating companies, in addition to inclusion into IAG’s joint businesses”

According to IAG growth charts, Air Europa will help the group transport more than 12 million more passengers by 2024, with at least 10 new destinations and 35 new planes added to the Iberia family. One thing is for certain: Iberia is looking to gain stronger footing in Latin America, as well as growing operations in Asia. Increased codeshares across the IAG network and schedule adjustments to create better timings for connecting flow will do tremendous credit to that effort.

With more slots at Madrid, which is one of the fastest growing airports by passenger traffic, Iberia and IAG will indeed establish a commanding role in the South Atlantic, in addition to picking up extra connecting traffic in Europe.

IAG sees this as an opportunity to transform Madrid into a proper Euro hub, along the lines of Paris, Amsterdam, Frankfurt or London Heathrow. Iberia will 100% become an Avios currency user, which has intriguing impacts for the Spanish and European markets at large.

At this point, it’s not entirely clear how the join operations will share synergies and work as one, while maintaining each brand identity, but they’ve got a year to make that clearer. Perhaps something like an Iberia Express? Either way, this is huge news for European air travel…