IAG to acquire Air Europa to transform Madrid into a major European hub
LONDON-HEADQUARTERED Anglo-Spanish airline holding company IAG has agreed to acquire another Spanish operator, Air Europa, for a cash transaction of EUR1 billion (US$1
LONDON-HEADQUARTERED Anglo-Spanish airline holding company IAG has agreed to acquire another Spanish operator, Air Europa, for a cash transaction of EUR1 billion (US$1.1 billion).
IAG said the agreement - placing the carrier under Iberia - will transform its Madrid hub into a 'true rival' to other major European bases such as Paris, London and Frankfurt.
From Madrid, the airline handles around 50,000 tonnes of cargo per year, where WFS handles cargo on the carrier's behalf. It launched a dedicated cargo operation in 2018.
Iberia chief Luis Gallego said the Madrid hub has 'lagged behind' other European stations, and the acquisition will enable the Spanish capital to compete 'on equal terms' - potentially becoming a link between Asia and Latin America, reports London's Air Cargo News.
The acquisition is expected to be completed in the first half of 2020.
'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,' said chief executive Willie Walsh.
Air Europa operates a fleet of 66 aircraft and last year turned in EUR100 million operating profit.
IAG said its brand will 'initially be retained' and the carrier will become a standalone profit centre within Iberia. It will integrate the airline into the Iberia hub structure at Madrid and establish commercial links with other IAG carriers. Air Europa will also be included in IAG's joint businesses.
Air Europa is owned by parent company Globalia and its chief, Javier Hidalgo said the IAG acquisition will 'maintain the path' followed by the Spanish carrier over the past few years, and that the takeover 'will be a success'.
IAG said it aims to achieve 'full run-rate synergies' by 2025, with revenue synergies achieved through intra-group codeshares, timing adjustments at Madrid, and alignment of sales and loyalty programmes.