IAG chief executive Luis Gallego remains optimistic that the group can secure approval for its long-running attempt to acquire Spanish carrier Air Europa after putting forward further remedies to address European regulator competition concerns over the planned acquisition.
The Iberia and Vueling parent has already pulled one bid for Air Europa, in part amid competition concerns over a number of Spanish short- and long-haul routes, before launching a fresh move for the carrier, under a restructured deal, a year ago. That saw IAG convert a loan to Air Europa’s parent company into a 20% shareholding in the airline and agree steps on acquiring the remaining 80%.
IAG has been hoping to secure Commission approval for the fresh deal by the end of this year, but these hopes were dealt a blow by the the regulator’s move in January to launch a wider investigation into the tie-up. That came in the context of an apparent tighter view on competition from the Commission after it launched a similar investigation into rival airline group’s Lufthansa’s move for Italian carrier ITA Airways.
”We always said that we are sure this operation is very positive for the customers, because what we want is to have more competition between the European hubs and, at the end, this is good for the customer. So the rationale behind it still makes a lot of sense,” Gallego said during a full-year results call on 29 February.
”We are in the second phase [with the Commission]. We are talking about remedies. We have increased the level of remedies.”
Gallego also notes that, while the Commission has launched probes into the Air Europa and ITA deals, it has also conditionally cleared Korean Air’s proposed acquisition of compatriot carrier Asiana Airlines after the carriers put forward fresh remedies.
“We see the level of remedies they have proposed and we consider that, with the proposals we [are] making to the European Commission, we can address the issues they are telling us they are worried about,” says Gallego. ”So I am optimistic about the deal.”
However he adds: ”We are not going to do anything that doesn’t make sense for the group if, at the end, the level of remedies is too high.”
