Iberia cancels purchase of Air Europa due to EU obstacles

Iberia has decided to abandon its acquisition of Air Europa, citing the current regulatory environment which does not favour the operation benefiting shareholders. This decision was communicated to the National Securities Market Commission (CNMV) on Thursday.

International Airlines Group (IAG), which includes Iberia, British Airways, Vueling, Aer Lingus and Level, had proposed giving up 52% of the routes operated by Air Europa in 2023 to gain approval from EU competition authorities. However, these authorities continued to have objections to the merger.

The purchase process intensified in December 2023 when IAG informed the European Commission about buying the remaining 80% of Air Europa for 400 million euros. In April, the European Commission raised concerns about potential competition risks, price increases, and a decline in service quality. To address these concerns, Iberia offered in May to transfer some of its and Air Europa’s routes to other airlines like Avianca, Binter, Iberojet, Ryanair, Volotea, and World to Fly.

By June, Iberia made further concessions to save the deal, based on constructive dialogue with the European Commission, which had until July 29 to make a final decision. Despite these efforts, Iberia concluded that proceeding with the acquisition under the current regulatory conditions would not be in the best interest of shareholders.