Air Europa’s improved performance since 2021 made it harder to identify sufficient remedies during IAG’s second failed attempt to acquire the Spanish carrier, according to the European Commission.
The Commission’s executive vice-president with responsibility for competition policy, Margrethe Vestager, made the comments in a 2 August statement acknowledging IAG’s termination of its agreement to buy the remaining 80% of Air Europa from parent company Globalia.
“This is the second time that the Commission was asked to assess the acquisition of Air Europa by IAG under EU merger control rules, after the first attempt failed in 2021 due to the Commission’s competition concerns,” Vestager says.
“Air Europa is in a stronger position today than it was in 2021 so the challenge of identifying adequate remedies was even greater than in 2021.”
The Commission’s enduring concern, she says, was that with Iberia and Air Europa having dominant positions in the Spanish market, competition would have been reduced by an acquisition, with adverse effects for consumers.
“IAG offered remedies, but taking into account the results of the market test, the remedies submitted did not fully address our competition concerns,” Vestager adds.
Speaking during IAG’s second-quarter earnings call on the same day, chief executive Luis Gallego said those remedies amounted to more than half of Air Europa’s frequencies in 2023.
“We proposed to transfer 52% of Air Europa frequencies in 2023 to two strong remedy takers but unfortunately this hasn’t been enough, and for that reason we consider that the deal doesn’t make sense for the group and that’s the reason we are cancelling the deal,” he states.
