IAG interested in Portugal’s TAP


Banco Sabadell: From the declarations in Bloomberg of IAG’s CEO, Luis Gallego, we highlight: They expect a better summer, although there are still difficulties such as air traffic control in France. In any case, they see very strong demand in Q2 and Q3, with less visibility for Q4.

Premium traffic is offsetting the weakness of corporate traffic, which remains at 70% of 2019 levels. On consolidation opportunities, apart from the Air Europa option they will look at TAP to see if it is an opportunity in the privatisation.

Assessment: Positive messages and in any case in line with what is already known and which we understand have been made in the framework of the IATA AGM being held today and tomorrow. With regard to the statements on TAP, it is not the first time that IAG has declared its interest given that IAG is very active in the consolidation of the market, although we do not expect it to materialise if the purchase of Air Europa goes ahead.

Moreover, although TAP has an 8% market share between Europe and Latin America (2019 figures, very much in line with what Air Europa had), we see less complementarity because it is very focused on the Brazilian market. On the other hand, cost synergies are not so clear because TAP has a different hub. In terms of cost, no figure has been indicated, although TAP’s size would be similar to that of Air Europa, at least in terms of LatAm share.

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