IAG offers to sell 52% of Air Europa’s routes to competition in order to take over company

Air EuropaAi-Europa

IAG’s latest proposal to take over Air Europa, submitted to the European Commission on 10 June, has increased from 40% to 52% the Air Europa capacity it would cede to other airlines (remedies) to meet the requirements of the Directorate General for Competition.

The increased remedies package is the final one before the verdict of the EU authorities. It is a response to the objections report delivered by the Directorate General for Competition on 26 April, when the Community’s opposition came to light in view of the fact that the acquisition would put IAG in a situation of dominance on routes between the Iberian Peninsula and the islands, on flights to different European countries and on a large part of those departing from Madrid to Latin America.
The routes questioned by Brussels numbered 58, and IAG had offered more or less convincing remedies for 40 of them. The remaining part would have been covered by the upgrade this June.

The combined operations of Iberia and Air Europa result in a 64% share of intercontinental flights at Madrid-Barajas (45% for Iberia and 19% for Air Europa), with an almost total dominance in connections between the Spanish capital and the main airports of Ecuador, Panama, Uruguay, Guatemala, Paraguay and Puerto Rico. The combined share is 75% between Brazil and Madrid, and over 50% on routes to Costa Rica, Argentina, Dominican Republic, El Salvador, Peru, Venezuela, Cuba, Bolivia and the USA.

“Our new offer envisages ceding up to 52% of the routes operated by Air Europa to competitor airlines by 2023. This does not mean a reduction in capacity, but rather a guarantee that on all routes there will be several competitors and, therefore, different options for travellers”, Iberia sources justify.

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