Monday, August 8

IAG offers concessions to obtain approval for the purchase of Air Europa

IAG sent this week to European Commission (EC) new concessions to obtain approval for the purchase of the airline Air Europa.

This is clear from the records of the community regulator, which extends until January 4 of next year the deadline to pronounce on the operation.

This represents an extension of one month, since the previous term ended on December 3. It is also the second time that Brussels has extended the decision period.

The threat to competition

The EC, however, did not reveal details about the new conditions offered by both Iberia’s parent company and Air Europa.

Waiting for the regulator, however, It is due to doubts it maintains about whether the acquisition of the airline could reduce competition on various air routes, especially between Spain and America.

For this reason, IAG could give up some of those connections as it did in May, when the group planned to give the airlines World2Fly and Volotea different routes and landing permits at Spanish airports.

Eventually there was no formal offer, so Brussels proceeded to begin new investigations into the operation in June.

70 marked routes

The European regulator indicated up to 70 routes that would be practically controlled by Iberia and Air Europa.

Routes that would mainly affect connections between Madrid and the United States or Latin America. Also to national routes in Spain or short-haul routes to the Spanish capital, where the exchange is made for trips to the other side of the Atlantic.

This is precisely one of IAG’s strengths, not only thanks to Iberia; also to the British British Airways, which has one of its main sources of income on the London-New York route.

Now, the Commission will assess whether the new concessions offered by the airlines do not affect competition in the sector. In this way, Brussels will carry out consultations with users and with the airlines’ own competitors.

If in the end the concessions will not affect competition, the EC would approve the operation but, if it does not meet its demands, it would reject it in a procedure that would be binding on both IAG and Air Europa.