The Hidalgo familyowners of 80% of Air Europa through Globalia, have been negotiating for several weeks with Air France-KLM the formula to give the Franco-Dutch conglomerate access to the capital of its airline. They do it after the merger with the group fails IAG (owner of Iberia), which despite now being its rival, retains a 20% stakeacquired before the European Commission questioned the takeover for limiting competition.
As elEconomista.es has learned, the scenario that both parties are handling involves Air France-KLM taking up to 20% of Air Europa’s capital, a position that would avoid elevating the operation to the community regulator. At the same time, it would provide a capital injection to the Spanish company that would allow it to avoid the cause of dissolution that it will incur at the end of 2025 if it does not receive a new oxygen cylinder.given its high debt.
The amount of the transaction has yet to be finalized, although will far exceed 100 million that IAG paid during the pandemic for its 20% of the shareholdinggiven the improvement in Air Europa’s operating results. In 2023, its revenue increased by 18% and achieved a historic profit of 165 million. For this year, they hope to raise that figure to the range of 180 to 200 million, given the strong demand for travel. In addition, it has already returned 124 of the 141 million of the loan granted by the ICO in 2020, as announced The Worldin the absence of doing the same with the rescues of the SEPI and the Government, estimated at another 475 million.
Asked about this operation, from Paris they confirm that “discussions are ongoing” and value the “long history of commercial association” between both parties. They assure that there is “a common interest in strengthening their commercial cooperation” in the face of “new panorama opened by the fact that the acquisition by IAG has not materialized“. From Palma de Mallorca they limit themselves to confirming that it exists”a collaborative relationship” by being part of the Skyteam alliance.
Industrial partner
with your movementthe Parisian group would become a kind of industrial partner of Air Europa, opening the door to forging new alliances with Air France-KLM itself, with which it already flies with shared codes; or with its partners, such as the recently acquired Nordic SAS or the American Delta, which looks to southern Europe to expand towards the south of the American continent.
As a prelude to what may come, the two airlines involved in this transaction endorsed an agreement in October that makes the maintenance subsidiary of Air France (AFI KLM E&M) in charge of preserving Air Europa’s Boeing 787 aircraft from March 1, 2025. This pact includes the launch of an AFI KLM E&M maintenance base in Madrid, which this company describes as a “significant expansion “within its plan to grow in Spain and the world. Air Europa’s total fleet amounts to 54 aircraft, divided between Boeing 787 for long haul and 737 for short haul. Its plans include reaching 60 units in the short term, relying on leasing.
Air France’s third attempt
Other major airlines, the German Lufthansa or some Asianalso showed their intention and even opened conversations with the Salamanca family, but all roads seem to lead to Paris. Air France’s third attempt to take over the Spanish company is on the right track. He tried it for the first time in 2018, when he negotiated the purchase of Air Europa in phases over five years in exchange for 1,000 million, a scheme that could be replicated now, since an initial purchase of 20% was planned even then. IAG then stood between them, offering the same value in a single payment.an agreement that ended up being terminated due to the pandemic and the serious impact it caused on the accounts of the firm then totally controlled by Globalia.
After Brussels’ first veto on the merger, Air France-KLM returned to the fray. This time under a new financing scheme that distributed the shareholding of Air Europa as 30% to the Hidalgos, 10% to Air France and 60% to Avolon Leasing, an aircraft lessor (lessor). He also participated in that operation the American Deltawhich proposed operational support from its investees Latam and Aeroméxico.
But just before it was signed, the CEO of IAG, Luis Gallegointervened again and agreed to a loan of 100 million convertible to 20% of the capital and the purchase of Air Europa for another 400 million if it received the OK from Brussels. This August, the community bureaucrats again refused the merger and the company led by Jesus Nuño de la Rosa (CEO) and Richard Clark (general director) flew free again and began to define his new future.
Waiting for IAG
The operation, parallel to the capital increase of Air Europa for a value of 80 million to close before the end of the yearleaves the question in the air about what will happen to IAG. The Spanish-British holding company continues without giving any clues as to whether it will contribute the 15 million necessary to avoid diluting its participation in the 20% to 16%, while remembering that its presence in the capital is purely financial.
“We have not made a decision on this yet.“, Gallego acknowledged in the last presentation of results when asked about this injection of funds. The ones who have done it are the Hidalgos, who have already confirmed the injection of 65 million to avoid technical bankruptcy.
IAG will allocate 8.4 billion to British Airways
The airline group IAG announced yesterday the investment of 7,000 million pounds (8.4 billion euros at the exchange rate) between 2024 and 2026 to increase the fleet and transform British Airways’ business. The program presented by Luis GallegoCEO of the group, and the directors of the British flag airline, contemplate the modernization of the Airbus 380 aircraft; new interiors in the short and long-haul cabins or improvements in Business.
It also proposes the reorganization of its operations at Heathrow, a plan to optimize punctuality and baggage delivery, investments in operational control, vehicles and airport equipment for electrification or to accelerate its plan to use SAF until it reaches 10% in the year. 2030. To do this, fsigned a new e-SAF supply agreement with Infinitium for a period of 10 years to be received from 2026.
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