The European Commission takes note of IAG's announcement that it has decided to terminate its agreement with Globalia according to which IAG intended to acquire sole control over Air Europa. IAG owns several airlines, including Iberia and Vueling, and is the largest airline operator in Spain. Air Europa is the third largest airline in Spain. Up to the abandonment of the transaction, the discussions with the companies and the proposed remedy package were not able to adequately address the competition concerns identified by the Commission. The Commission had opened an in-depth investigation into the proposed transaction on 24 January 2024 and sent a Statement of Objections to IAG on 26 April 2024.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "IAG and Air Europa are leading airlines in Spain. From their hubs in Madrid, they are key providers of connectivity within Spain and between Spain, the rest of Europe and the Americas.
We looked closely at the impact of the transaction on competition, especially on those routes in which alternative flights are limited. Our in-depth analysis indicated that the merger would have negatively affected competition on a large number of domestic, short-haul and long-routes within, to and from Spain on which the two airlines compete closely.
We were concerned that the transaction may have led to adverse effects for passengers – business customers and consumers alike – in terms of increased prices or decreased quality of services. IAG offered remedies, but taking into account the results of the market test, the remedies submitted did not fully address our competition concerns.
This is the second time that the Commission was asked to assess the acquisition of Air Europa by IAG under EU merger control rules, after the first attempt failed in 2021 due to the Commission's competition concerns. Air Europa is in a stronger position today than it was in 2021 so the challenge of identifying adequate remedies was even greater than in 2021."
Background
