August 14, 2020

The purchase of Air Europa by Iberia, a matter of State

Gallego says the operation protects the Globalia airline from competition in the sector and will help boost the Barajas hub

Almost from the same moment that Iberia announced the acquisition of Air Europa, rumors began to circulate about the sector that the former Spanish flag carrier had accelerated the operation to get ahead of Air France, whose road map appeared to be made with the signature of Globalia in a maximum term of five years. The acquisition would have had all the logic of the world. Both companies maintain collaboration agreements and the incorporation of the Spanish company to the Air France-KLM Group would have strengthened its leadership in Latin America. But the Iberia movement has thwarted Franco-Dutch plans because it will allow it to balance forces on the other side of the Atlantic and strengthen the Barajas hub as a bridge between Asia and America. “It was not positive for Spain that Air Europa ended up in the hands of Air France. Air France's interest is to defend its Paris hub and not reinforce that of Madrid », he said yesterday President of Iberia, Luis Gallego, in a conference of the CEOE and Cepyme.

Gallego said the operation is strategic for the State because it protects Air Europa in an environment of fierce competition such as air and will help consolidate the Madrid hub. Spain, he explained, needs to “consolidate itself to compete at European and world level” and strengthen Barajas as a first division hub of 360 degree model, at the height of others such as Paris or Heathrow. And, for that, the president assured that the union of both airlines was “essential”. It is, he said, because it will allow strengthening the IAG group, parent company of Iberia, which will result in synergies of costs and revenues to be able to make more offers to customers and be able to compete, which will help to protect employment and boost Barajas . A push that, Gallego insisted once again, would be greater if the main terminal of the airport, the T-4, was connected to the AVE network. “We believe that the integration of Air Europa is a great opportunity for Madrid and Spain and is good for customers, while helping Spain generate more employment and tourism. IAG buy Air Europa is the best thing that can happen to the Spanish economy ”Galician summed up.

Although there were doubts about the maintenance of the Air Europa brand, Gallego insisted yesterday that the company will continue to operate independently, although organically it will depend directly on Iberia and not IAG. From Iberia they believe that this way they can be “more efficient and better develop the Madrid hub”. Although at the moment only Iberia operates in the T-4, the logical thing is that when the hubs overlap, the normal thing is that the operations are concentrated in one, something that according to Gallego would be good because it would give Barajas growth capacity in others terminals Iberia is aware that Competition will most likely impose that there are competitors on certain routes.


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