Air France/KLM Group has placed a €300 million bid for a majority stake in Spanish airline Air Europa, according to Spanish newspaper El Confidencial. This move positions the Franco-Dutch airline group in direct competition with Lufthansa, which is also vying for a stake in the struggling airline.
According to El Confidencial, Air France-KLM proposes to pay the sum in cash to the Hidalgo family, which currently holds the majority of Air Europa’s shares, in exchange for a 51% stake. Additionally, Air France-KLM is reportedly willing to assume the airline’s outstanding debts owed to the Spanish government. The group declined to comment when approached by the Dutch news agency ANP.
The competition for Air Europa follows the collapse of an attempted acquisition by International Airlines Group (IAG), the parent company of Iberia, due to regulatory concerns. Lufthansa has also expressed interest in the airline, reportedly offering a €240 million investment in exchange for a 25% stake.
For some time, Lufthansa appeared to be the frontrunner in the battle, with Air Europa even leasing a Boeing 787 to Brussels Airlines, a Lufthansa subsidiary, as part of a potential collaboration test. However, El Confidencial reports that the Hidalgo family is now divided over which offer presents the best opportunity for Air Europa’s future.
Burdened by debt accumulated during the COVID-19 pandemic, Air Europa is in urgent need of financial support. Whether Air France-KLM or Lufthansa emerges victorious in securing a stake in the airline will likely depend on both financial terms and strategic considerations for the future of Spanish aviation.
