IAG, the owner of British Airways and Iberia, has taken a 20% stake in Spanish airline Air Europa after converting a loan.
IAG was initially in talks to acquire Air Europa, but scrapped the planned deal in December 2021 after the COVID-19 pandemic shifted the aviation landscape.
However, with other parties showing interest in Air Europa, IAG came up with a new strategy in March 2022. Under that plan, IAG, which also owns Vueling, Aer Lingus and Level, provided a €100 million ($101 million) seven-year unsecured loan to Air Europa parent Globalia and agreed a period of exclusivity for one year on talks for the airline.
“IAG announces that it has exercised its option to exchange the Group’s €100 million seven-year unsecured loan to Globalia for a 20 per cent equity stake in Air Europa,” the airline group said in a brief statement to the stock exchange on August 16, 2022.
IAG is keen to use an acquisition of Air Europa to expand its hub in Madrid, where Iberia is based.
Air Europa’s fleet is made up of 22 Boeing 787 Dreamliners and 20 Boeing 737 NG aircraft. Its Express regional unit also operates the Embraer E195.