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BRITAIN-SPAIN-AVIATION-IAG
Airline giant IAG gets Air Europa on cheap over virus
LONDON, Jan 20, 2021 (BSS/AFP) – British Airways owner IAG on Wednesday
said it would pay only half the agreed purchase price of Spain’s Air Europa,
and not for more than six years, as the sector is ravaged by the coronavirus.
IAG will pay 500 million euros ($606 million) to Air Europa-owner
Globalia, down on the initial 1.0-billion-euros price tag agreed in November
2019.
“IAG and Globalia today announce that they have amended the original
agreement,” the pair said in the statement.
“The parties have agreed that the amount to be paid… will be reduced
from an equity value of 1.0 billion euros to 500 million euros with payment
deferred until the sixth anniversary of the acquisition’s completion.”
The deadly Covid-19 health crisis has decimated demand for international
air travel, grounding planes worldwide and sparking thousands of job losses
under drastic restructuring.
And the Spanish government has granted Air Europa a lifeline of 475-
million-euros in loans to help see the carrier through the pandemic.
IAG, which operates also Ireland’s Aer Lingus and low-cost European
carrier Level, hopes the Air Europa transaction will generate significant
savings across the group.
The takeover is aimed also at expanding routes to Latin America and the
Caribbean, while complementing IAG’s Spanish divisions Iberia and Vueling.
The conglomerate wants to help Madrid take on the four largest air hubs in
Europe: Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle.
“Both Iberia and IAG are demonstrating their resilience to face the
deepest crisis in aviation’s history,” IAG chief executive Luis Gallego said
in the statement.
“Being part of a large group is the best guarantee to overcome current
market challenges which will also benefit Air Europa once the transaction is
completed.
“I am pleased that we have reached agreement with Globalia to defer
payment until well into the expected recovery in air travel following the end
of the pandemic and when we expect to be realising significant synergies
resulting from the transaction.”
Founded in 1986, Air Europa was the first private airline to operate
scheduled domestic flights within Spain, breaking Iberia’s monopoly.
BSS/AFP/IJ/1944 hrs