British Airways Parent Company Acquires SkyTeam Member Air Europa

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. You know who would’ve been an even better partner for dominating the South American market?

    LAN

  2. Trans-Atlantic travel is going to just keep getting more expensive as consolidation continues to reduce competition. It is too bad that for the most part regulators continue to approve these takeovers and JVs.

  3. Why the heck would European regulators approve this deal? They have strong monopoly protection in the EU and this would grant IAG a monopoly in Spain.

  4. This is bad news. Post EU, we are seeing the re-emergence of fortress hubs, stifling competition and reducing choice.

    IAG now controls close to 20% of trans-Atlantic travel. It’s amazing how close they’ve come to mirroring conditions from the 18th century: If you want to cross the pond, you’ll pay a toll to Madrid!

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