Air France-KLM Eyes Air Europa Control
Air France-KLM has reportedly tabled an offer of €300 million (approximately $330 million) to take a controlling 51% stake in Spanish carrier Air Europa, a move that challenges the long-standing favorite, Germany’s Lufthansa Group. According to Spanish newspaper El Confidencial, the Franco-Dutch airline consortium has proposed paying €300 million in cash to the Hidalgo family, which currently holds the largest shareholding in Air Europa through its Globalia travel consortium. In addition to the cash payment, Air France-KLM is reportedly willing to assume the airline’s outstanding debts owed to the Spanish government – debts that were accrued through lifeline loan payments made during the COVID-19 pandemic to help keep Air Europa afloat.
Air Europa has faced significant struggles in recent years, even before the pandemic hit, and its financial difficulties were compounded by a proposed takeover by the International Airlines Group (IAG), the owner of British Airways and Iberia. That deal collapsed in August 2024 after EU competition authorities ruled that a merger would be anti-competitive. In the wake of IAG’s exit, Lufthansa emerged as the front-runner, reportedly offering a €240 million investment in exchange for a 25% stake in the Madrid-based airline. The German carrier has been on an unrelenting drive to consolidate its position in Europe, owning majority shareholdings in prominent airlines such as Lufthansa, SWISS, Brussels Airlines, ITA Airways, Discover Airways, and Austrian Airlines, while also signaling intentions to bid for a stake in TAP Air Portugal when the opportunity arises.
Despite these competitive dynamics, there are already established operational links between Lufthansa and Air Europa, including the leasing of a Boeing 787-9 from Air Europa to Austrian Airlines. However, El Confidencial has reported that the Hidalgo family remains divided on whether to accept the bid from Air France-KLM or continue with Lufthansa’s proposal. Decision makers are weighing factors such as the potential for each party to grow Air Europa, which analysts believe is currently operating at sub-optimal efficiency levels and struggling to compete with Spain’s flag carrier Iberia. Other important considerations include assurances regarding the airline’s financial stability and the prospect of enhanced partnership opportunities, such as interline and codeshare agreements that could strengthen Air Europa’s network.
Earlier in March 2025, Air France-KLM Chief Executive Benjamin Smith stated that acquiring a stake in Air Europa would be of significant interest to the group, which has also recently acquired a 19.9% stake in Scandinavian carrier SAS. The strategic rationale behind these moves is to unlock Air Europa’s potential and stabilize a carrier that served 12 million passengers across Europe, Latin America, and the Caribbean in 2024, operating a fleet comprising 26 Boeing 737-800s, seven Boeing 787-8 Dreamliners, and 15 Boeing 787-9s with an average age of just over nine years. With the Spanish aviation market poised for further consolidation and growth, the decision on whether to proceed with Air France-KLM’s or Lufthansa’s bid will have significant implications for the future competitive landscape of European aviation. As both consortia continue to refine their proposals, industry observers remain keenly interested in how Air Europa will be repositioned to better compete in a challenging and rapidly evolving market.
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