IAG offers concessions for Air Europa, Brussels dallies

Brussels has further extended its “in-depth investigation” of IAG International Airlines Group’s EUR500 million euro (USD583 million) bid to buy Air Europa (UX, Palma de Mallorca) until January 4, 2022, the European Commission has revealed, as IAG offers further concessions to allay antitrust concerns.

The commission, the EU’s competition regulator, had previously set its deadline to decide on the acquisition of Spain’s third-biggest airline by passenger numbers, after Vueling Airlines and Iberia – both already part of IAG – as November 5. In July, it extended this time limit to December 3.

In its latest filing, issued on October 29, the regulator did not say what concessions the airlines had offered. However, according to reports, two days previously IAG had suggested some divestments including route concessions in order to prompt antitrust approval.

Given the high market share of both companies on certain routes, the European Commission is now expected to seek more feedback from competitors and consumer groups before making its decision – or request more concessions.

The commission said in June 2021 that a preliminary probe had revealed that the two companies “compete head-to-head for passenger air transport services in Spain, in particular on several routes from Madrid to the US and Latin America, and on several domestic and short-haul routes, including feeder traffic routes bringing passengers to Madrid Barajas to continue their journey on long-haul flights to the US and Latin America.”

Specifically, Brussels expressed its concern that “the proposed transaction could significantly reduce competition on 70 origin and destination city pairs within and to/from Spain, on which both airlines offer direct services. On some routes, IAG and Air Europa have been the only two airlines operating.”

Air Europa did not immediately respond to ch-aviation’s request for comment, while IAG commented: “We continue collaborating with the European Commission’s process.”