The Spanish airline Iberia has proposed to the European Commission give up to competition up to 52% of the routes operated by Air Europa in 2023, in order to obtain approval for the purchase of this company. This movement represents a “very important effort,” according to sources close to the company. EFE Agency, that assert the airline’s interest in completing the operation. For several months the firm has maintained a “constructive” dialogue with the European Commission to address the objections that Brussels sent to it regarding the Air Europa purchase operation.
The Commission maintains doubts about the impact of the operation on direct competition. Brussels had until June 7 of this year to adopt a final decision on the merger, but the deadline has been extended until next August 20. Last Monday, June 10, the airline delivered the “remedies” package, measures to guarantee competition, expanded with some modifications to the previous one. This new offer contemplates ceding up to 52% of the routes operated by Air Europa, which increases the previously proposed 40% offer by twelve percentage points.
As Iberia explains, This operation does not imply a reduction in capacity, but rather the guarantee that there are several competitors on all routes and, therefore, different options for travelers. “This is a very important effort, which demonstrates our interest in the operation and our desire that the purchase of Air Europa be carried out with all the guarantees for consumers,” add the same Iberia sources.
From his point of view, the sum of forces of the two largest Spanish airlines It is “essential” to develop the Madrid “hub” at the level of those in northern Europe, as well as to improve connectivity between Spain and other international destinations such as those corresponding to the Asian market. The European Commission has now set August 20 as the deadline to make a decision on the operation, although there is the possibility of further pauses in its study or another extension of the deadline, so the decision could be delayed.
In the last “objections document” published about this purchase, at the end of last April, the community authorities reflected the problems they detected in the operation, especially on a series of routes for which they believe there may be a price increase or a worse quality of the offer. To the Competition services of the Community Executive They are concerned about the effect of the merger on long-haul routes between Madrid and North and South Americaas well as in connections with the two Spanish archipelagos and certain European links.
This second purchase attempt was officially notified to the European authorities on December 11, 2023. IAG (parent of Iberia) now intends to take over 80% of the capital of Air Europa that it still does not control for 400 million euros, which is added to the 100 million euros that it already paid for the remaining 20% in August 2022.
