IAG, parent of British Airways, also owns Iberia, Aer Lingus, Vueling, and LEVEL. Now for the price of €1 billion they’re acquiring Air Europa (10 times current earnings). The deal is expected to close in the second half of 2020.
They are currently the third largest Spanish airline, behind Iberia and Vueling already owned by IAG, and currently operate Airbus A330s, 737-800s, and Beoing 787s. The airline has Boeing 737 MAX 8s and 787-9s on order.
While this would give IAG undisputed control over air traffic in Madrid, through ownership of both Iberia and Air Europa, their argument is that this increases competition by giving Madrid scale to compete against hubs they don’t control such as Frankfurt and Amsterdam.
Copyright Alan Wilson via Wikimedia Commons
Air Europa will be used to grow business between Spain and Latin America. The plan is to integrate Air Europa into existing joint ventures and to use Avios as the Air Europa loyalty currency (they only launched their own frequent flyer program four years ago). Eventually then we should see American AAdvantage miles redeemable on Air Europa flights.
Currently Air Europa is one of the few bright spots redeeming Delta miles for transatlantic business class travel during peak periods, using their New York JFK and Miami – Madrid flights.