Air Europa, a Spanish airline with important connections to South America and the Caribbean, has been sold to International Airlines Group for €500 million, half the price originally agreed in 2019.
IAG, parent of British Air, Iberia and Aer Lingus, as well as discount carrier Vueling, backed out of the original €1 billion deal when the pandemic upset all airline plans. Last August, it acquired 20% of the company by taking shares in Air Europa in lieu of loan payments that were due.
The new transaction takes the remaining 80% for €100 in IAG stock and €300 million in cash spread over the next two years. The deal will now be subject to approval by EU competition authorities. Critics of the original deal felt that it might reduce competition, while IAG says it will strengthen competition in the South Atlantic market and make Madrid a more important European hub.
IAG plans to retain the Air Europa name as a working brand, while putting the airline under management of Iberia.
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