Aérien : IAG convertit son prêt à Globalia en une part de 20% du capital d'Air Europa

International Airlines Grouping (IAG) has exercised its choice to catechumen a €100 million loan to Spanish carrier Air Europa into a twenty percent share, it announced on August xvi in a regulatory filing. This means that IAG has finally got a human foot in the door with the contained airline that is withal bulk-owned by travel group Globalia. IAG swaps Air Europa loan for a xx percent stake.

In March, IAG provided Globalia with a vii-year, unsecured €100 million loan to quench capital needs for Air Europa following the Covid crisis. The airline already received a €141 one thousand thousand loan from the Instituto Credito Official (ICO) and a €475 one thousand thousand loan from the Sociedad Estatal de Participaciones Industriales (SEPI), the latter maturing in 2027. Both ICO and SEPI approved the loan to Globalia.

With the loan, IAG got the exclusive correct to continue negotiations near the conquering of Air Europa for a year. Simply information technology too included the right to convert the loan into a 20 percent share. There was too an leave strategy for IAG if Globalia would sell Air Europa to a third political party, but this scenario seems unlikely at present that IAG has secured a minority share.

On the radar since 2019

Air Europa, which operates a fleet of 20 Boeing 737-800s, 22 787-8s and -9s, and three Embraer E195s, has been on IAG's radar since 2019. The airline group fabricated a first, €1.0 billion offer in Nov 2019 but tried to renegotiate this to €500 1000000 after the outbreak of the Covid crisis in 2020. On and off talks continued for most of 2021, until IAG and the Hildago family that owns Globalia reached an understanding on the unsecured loan.

The question is: what happens adjacent? Will the equity share be the start of something more than for IAG? According to the Castilian newspaper El Pais, the IAG pale is conditional on Air Europa standing to operate every bit an independent airline without whatever interference from IAG subsidiary Iberia. The original 2019 plan had an investment unit of Iberia, IB OPCO, brand the €ane.0 billion investment in Air Europa and integrate Air Europa within Iberia. This would provide significant price and revenue efficiencies through synergies before Air Europa would be fully integrated in 2025.

Brussels concerned most Air Europa-Iberia merger

The pale of IAG in Air Europa will certainly become the attention of the European Committee. In June 2021, the contest branch of the EC launched an in-depth investigation into the acquisition plan which at the time consisted of the €500 one thousand thousand offer from IAG. Brussels has always been concerned almost the size that a combination of Air Europa and Iberia would have on competition in Spain and on routes from Madrid to the U.s. and Latin America.

In a preliminary market investigation, the Commission said that "it is concerned that the proposed transaction could significantly reduce contest on seventy origin and destination (O&D) city pairs within and to/from Spain, on which both airlines offer straight services. On some routes, IAG and Air Europa accept been the just 2 airlines operating. The Committee is also concerned about the effect of the proposed transaction on routes on which other airlines rely on Air Europa's domestic and brusk-haul network for their own operations at the Madrid airport and a number of other EU airports. Without Air Europa'south feeder traffic, some airlines may decide to terminate their services to international destinations too served by IAG, reducing choice for travelers."

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Richard Schuurman

Agile as journalist since 1987, starting with regional paper Zwolse Courant. Chiliad Prix reporter in 1997 at Dutch monthly Formule ane, general reporter Lelystad/Flevoland at De Stentor/Dagblad Flevoland, from 2002 until June 2021 radio/goggle box reporter/presentor with Omroep Flevoland.
Since mid-2016 freelance aviation journalist, since June 2021 fully dedicated to aviation. Reporter/editor AirInsight since Dec 2018. Contributor to Airliner Globe, Piloot & Vliegtuig. Twitter: @rschuur_aero.

Source: https://airinsight.com/iag-swaps-air-europa-loan-for-a-20-percent-stake/

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