Iberia and Air Europa close to breaking the sale agreement

Iberia and Air Europa are in “an advanced stage” in their negotiations to rescind the draft agreement by which the first airline would take over the second. The initial bid was 1,000 million euros, but it was finally lowered to 500 million after the COVID pandemic.

This has been confirmed this Wednesday by Iberia’s parent company, International Airlines Group (IAG), in a letter to the National Securities Market Commission (CNMV), in which it explains that it is negotiating the breaking of the agreement reached with Globalia, the owner of Air Europa, in November 2019.

The companies have decided to give themselves an additional period to close a new agreement that is not vetoed by the European Commission.

“A new update will be made in the future, as appropriate,” says IAG. And the fact is that the union of both airlines could generate competition problems on some 70 routes in which Iberia and Air Europa are the main or even the only operators.

According to the agreement in force so far between both parties, if the purchase was not successful, IAG would have to pay Air Europa 40 million as compensation, although according to the IAG statement on Wednesday, the groups could be negotiating new terms.

The Spanish Ministry of Transport and Mobility will analyse the different options that are open to guarantee the continuity of the activity and operations of Air Europa, due to its importance for the aviation and tourism sectors.

Source: RTVE