Airline Giant IAG Gets Air Europa on Cheap Over Virus 20 January 2021

Airline giant IAG gets Air Europa on cheap over virus 20 January 2021

British Airways owner IAG on Wednesday said it "Both Iberia and IAG are demonstrating their would pay only half the agreed purchase price of resilience to face the deepest crisis in aviation's Spain's Air Europa, and not for more than six history," IAG chief executive Luis Gallego said in years, as the sector is ravaged by the coronavirus. the statement.

IAG will pay 500 million euros ($606 million) to Air "Being part of a large group is the best guarantee to Europa-owner Globalia, down on the initial overcome current market challenges which will also 1.0-billion-euros price tag agreed in November benefit Air Europa once the transaction is 2019. completed.

"IAG and Globalia today announce that they have "I am pleased that we have reached agreement amended the original agreement," the pair said in with Globalia to defer payment until well into the the statement. expected recovery in air travel following the end of the pandemic and when we expect to be realising "The parties have agreed that the amount to be significant synergies resulting from the transaction." paid... will be reduced from an equity value of 1.0 billion euros to 500 million euros with payment Founded in 1986, Air Europa was the first private deferred until the sixth anniversary of the airline to operate scheduled domestic flights within acquisition's completion." Spain, breaking Iberia's monopoly.

And the Spanish government has granted Air Europa a lifeline of 475-million-euros in loans to help see the carrier through the pandemic.

IAG, which operates also Ireland's Aer Lingus and low-cost European carrier Level, hopes the Air Europa transaction will generate significant savings across the group.

The takeover is aimed also at expanding routes to Latin America and the Caribbean, while complementing IAG's Spanish divisions Iberia and Vueling.

The conglomerate wants to help Madrid take on the four largest air hubs in Europe: Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle.

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APA citation: Airline giant IAG gets Air Europa on cheap over virus (2021, January 20) retrieved 30 September 2021 from https://techxplore.com/news/2021-01-airline-giant-iag-air-europa.html

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