Air Europa’s owner Globalia confirms interest from Air France-KLM

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Franco-Dutch firm Air France-KLM is interested in buying a stake in Air Europa, said Globalia on Wednesday.

The owner of Air Europa said in an email sent to Euronews that “there is interest…but currently nothing is closed”.

Air France-KLM has not yet responded to a request for comment.

The response comes after Spanish newspaper El Economista reported that Air France-KLM was in discussions to buy as much as a 20% stake in the other airline.

The price of the stake would be over the €100 million that IAG group paid for a similar share in 2022, said the Spanish newspaper – citing unidentified sources.

El Economista added that the transaction wouldn’t require a green light from the EU as the stake is not large enough to be considered anti-competitive. 

Air Europa, owned by Spanish group Globalia, would benefit from the cash injection linked to an Air France-KLM investment – despite making a strong €165 million of net profit in 2023.

The deal would also allow Air France-KLM to strengthen its presence in southern Europe and increase access to the Latin American market.

Failed IAG takeover

The news comes after IAG, which owns Aer Lingus and British Airways, scrapped plans to take over Air Europa in August. It nonetheless retains its 20% stake.

“It doesn’t make sense for our shareholders and that’s the reason we are abandoning the operation,” said IAG’s CEO Luis Gallego at the time.

Valued at €400 million, the transaction collapsed due to regulatory pushback from the European Commission.

EU watchdogs were concerned that the deal could threaten healthy competition in the airline industry, potentially increasing fares for passengers.

They argued that concessions offered by IAG, notably making certain routes available to rivals, did not do enough to address these concerns.

Consolidation in Europe

Consolidations of smaller airlines in Europe are becoming more common although fears of anti-competitive behaviour are still slowing deals.

In March of this year, CEO of Ryanair Michael O’Leary said that the European Commission should “get on with it and approve these mergers because, ultimately, it is the way forward in Europe”.

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He argued that smaller firms are struggling to compete with bigger airlines, with many subsequently requiring taxpayer support.

“If we don’t allow consolidation in Europe, we will destroy airlines in Europe,” IAG CEO Luis Gallego said at the same industry event – held in Brussels.

Despite the failure of the IAG takeover, Air France-KLM this year acquired a 19.9% stake in Scandinavian Airlines (SAS).

Lufthansa, meanwhile, is buying a stake in Italy’s ITA Airways.

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