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IAG agrees to buy Air Europa, again – the benefits are Madrid slot share, Europe-Latin America

Premium Analysis

On 23-Feb-2023 IAG announced that it had agreed the acquisition of the 80% of Air Europa that it does not already own, paying EUR400 million for the stake.

IAG originally agreed to buy Air Europa from Globalia for EUR1 billion in 2019, but the expected 2020 closing of the deal was thrown off course by the COVID-19 pandemic.

A new agreement, at EUR500 million, was reached in 2021, but this also fell by the wayside. IAG converted a loan to Globalia into a 20% equity stake in Air Europa in Aug-2022.

The deal will take IAG's Madrid slot share from 51% to 67%, putting it on a more equal footing with rivals at other leading European hubs. It will also give the group leadership by capacity on routes between Europe and Latin America, jumping ahead of Air France-KLM.

The agreement still requires regulatory approval and IAG is assuming an 18-month timeframe to completion.

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