British Airways and Iberia owner IAG has terminated its agreement to purchase Spanish carrier Air Europa from its parent company Globalia, citing the “current regulatory environment”.
Reports had emerged in recent weeks that the European Commission was preparing to reject the deal on competition grounds, despite IAG having put forward extra remedies in an attempt to address those concerns.
“We believe this decision is in the best interests of our shareholders,” says IAG chief executive Luis Gallego.
“IAG remains committed to its strategy, including competing effectively from its Madrid hub.
“We will continue to develop our presence in Madrid so that the hub can develop as a rival to Europe’s largest hub airports.’’
IAG had already pulled one bid for Air Europa in late 2021, in part amid competition concerns. It launched a fresh move for ownership of the carrier in 2023 under a restructured deal, having taken a 20% stake in the business in August 2022.
IAG notes that it continues to hold that 20% minority interest in Air Europa.
The group made the announcement as it also released its earnings for the April-June quarter, when it achieved an operating profit of €1.24 billion ($1.34 billion), which was down slightly on the record €1.25 billion it reported in the same period of 2023.
Revenue of €8.3 billion was up 8% year on year, while its net profit of €909 million was down 10% from 2023.
It reports “strong demand for travel” for the rest of 2024, “particularly in our core markets of the North Atlantic, Latin America and intra-Europe”, and is guiding for full-year capacity growth of 7%.
