Iberia renounces its merger with Air Europa due to Brussels’ demands

Aquí Europa The Spanish airline Iberia has cancelled the purchase of Air Europa because, "in the current regulatory environment", continuing with the operation "would not be in the interest of the shareholders", as it communicated this Thursday to the National Securities Market Commission, the stock market regulator in Spain. International Airlines Group (IAG), which includes the airlines Iberia, British Airways, Vueling, Aer Lingus and Level, had offered to get rid of 52% of the routes operated by the also Spanish Air Europa in 2023, to obtain the approval of the European competition authorities, which maintained objections to the merger. The merger would affect flights linking Madrid with the United States or Latin America, as Iberia and Air Europa compete in the Latin American market and have overlapped in many destinations such as the Dominican Republic, Cuba, Panama, Asunción, Bogotá, Buenos Aires, Miami or New York. The demands of the Directorate General for Competition Sources from Iberia explained that the demands of the Directorate General for Competition of the European Commission to give the green light to the operation are so high that it no longer makes business sense for the airline, so they have decided not to go ahead. According to these sources, the transfer to other competitors of up to 52% of Air Europa's frequencies and the guarantee that none of the routes in which the European Commission had identified competition problems would be left without a third operator supported the merger. Iberia and IAG had presented a list of possible "remedy takers" or competitors to which the routes are transferred, "very solid", some of which, such as the Spanish Volotea and the Colombian Avianca, had even signed alliances between them to be able to carry out the operations with the greatest guarantees. All this has been insufficient for the Commission, so the purchase of Air Europa "is no longer among our objectives", say these sources, who "regret Brussels' refusal to accept this ambitious proposal". They recall that Brussels has just approved other consolidation operations in the air sector, such as the purchase of the Italian ITA by the German Lufthansa, "and we believe that our proposal met all the conditions to have followed the same path".

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