International Airlines Group, already parent to British Air, Iberia and Aer Lingus and Vueling, is adding another brand, Air Europa, that will strengthen its position on key routes, and make Madrid an even more important hub for international travelers.
Air Europa operates a number of domestic routes in Spain, but its biggest strength is in its routes between Spain and cities in Latin America and the Caribbean, an area where IAG is weaker. The number of destinations reachable through Madrid on IAG routes, it hopes, will push Madrid up with Amsterdam, Paris and Frankfurt as a hub.
The deal, all cash, sees IAG paying Globalia Corp., the previous owner €1.1 billion. Air Europa has a fleet of 66 planes; it flies A330s and Boeing 787s on its long-haul routes.
Air Europa is a SkyTeam member, but it is expected to shift to the OneWorld Alliance that British Air and Iberia are leading members of. That would be a reverse flip: LATAM recently ditched OneWorld after a big investment from SkyTeam leader Delta.