Iberia will acquire 20% of Air Europa before the end of the year after receiving the approval of SEPI | Economy

Iberia will acquire 20% of Air Europa before the end of this year, after receiving the approval of the State Industrial Participation Company (SEPI) and the creditor bank of the 100 million convertible loan granted by IAG, Iberia’s parent company , to Globalia, the owner of the Hidalgo family airline, according to the president of Iberia, Javier Sánchez-Prieto, on Thursday.

After the prior authorization, a period of six months is now open for the competition authorities of Spain, Germany and the United Kingdom —countries in which Air Europa operates— to give their approval to the conversion of the loan into 20% of the capital, but Sánchez-Prieto explained that he does not expect them to put any obstacles because Iberia only has to demonstrate that, despite having that participation, they are not going to have influence in the management of the rival airline, but that it is only an investment financial.

At the same time, Iberia is negotiating the authorizations to take over 100% of the company, in particular, with the competition authorities in Brussels, although it will also have to have the approval of SEPI, which has provided loans for more than 600 million euros. euros to the Hidalgo family airline. The CEO of the IAG group, Luis Gallego, already announced in the presentation of results that this negotiation could last 18 months.

IAG and Globalia announced on March 17 an agreement whereby the Spanish-British group grants the holding company tourism an unsecured loan of 100 million euros over seven years, with the option of converting it into a stake of up to 20% in the airline’s capital. This agreement, whose ultimate goal is for Iberia to take over all of Air Europa, is accompanied by a one-year exclusivity period while the talks take place. In turn, it contemplates a right to match any third-party offer for the airline in the next three years, together with a right of exit from Globalia in the event that it decides to sell Air Europa at any time in the future.

transformation plan

On the other hand, Sánchez-Prieto, at a press conference from Washington, where the airline has just inaugurated a new direct flight with Madrid, presented the Next Chapter Transformation Plan, with which Iberia intends to recover profitability and face the scenario post-pandemic.

He knows in depth all the sides of the coin.


One of the focuses of the plan is to contain fuel costs, which increased by 20% in the first quarter of this year and which account for a third of total expenses. The airline has a coverage that ensures the price of 78% of kerosene for the third quarter, 65% for the fourth quarter and 25% for the next year.

The top manager of Iberia was “optimistic, but cautious” about the recovery of air traffic, although he did not specify whether the company will apply a price increase on tickets to pass on the increase in fuel costs. “We are going to have very competitive prices”, he limited himself to pointing out.

An effort will also be made in hiring workers. In this sense, the manager announced that, after the departure of all the staff last February from the temporary employment regulation file (ERTE) that was applied during the pandemic, the company will hire 400 cabin crew this summer and 1,700 ground employees.

Sánchez-Prieto also highlighted that Iberia, together with Vueling —of the IAG group, like Iberia—, will have to make an effort to face the expiration in 2025 and 2026 of the payment of the syndicated loans signed with several banking entities and guaranteed by the ICO for 1,010 million euros to deal with the impact of the coronavirus pandemic.

Iberia wants to grow in the US market and, in addition to the Madrid-Washington route, it will inaugurate Madrid-Dallas and resume the route to San Francisco, which will operate from June 1. In total, Iberia will increase its connections from Madrid with the United States, going from six to nine connected destinations and more than 120 weekly frequencies.

On the other hand, Iberia contributes to the Spanish economy the equivalent of 9,306 million euros per year, equivalent to 0.6% of GDP, of which 1,679 million are directly, according to a PWC study presented during the meeting with journalists. Likewise, the airline generates 164,206 jobs, of which 15,203 are part of its workforce.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button