IAG Scraps Air Europa Purchase

International Airlines Group (IAG), the owners of British Airways, Aer Lingus, and Iberia, has scrapped plans to purchase Air Europa.

IAG had long sought a deal to acquire Air Europa, which would boost its European connectivity and give it greater access to emerging markets.

These takeover plans are part of the region’s consolidation efforts, with IAG competing with several other leading airline groups, such as Air France-KLM, Lufthansa Group, and others.

The termination of a proposed takeover from IAG follows what they describe as a regulatory environment, which causes considerable concerns and lacks a clear pathway for eventual success.

Unfortunately, airline purchasing has greater roadblocks than just terms with the respective party. The process is long-winded, and one of the greatest hurdles is regulators approving the deal.

The regulatory approval will follow strict principles that won’t falter despite the circumstances. As part of this review, the regulator will examine the overall impact of such a proposed deal and whether this will negatively affect competition and passengers, among other factors.

If all these factors are examined and the results are positive, the deal will likely move towards the next stages. However, in many cases, these regulatory studies will reveal things that need to be changed or are too worrying to allow such a deal to proceed.

There were considerable concerns regarding the deal IAG and the Air Europa purchase. The European Commission had clarified that they believed an acquisition would reduce competition, thus impacting customers, airfares, and more.

Ultimately, many onlookers believed the EU would continue to push to block the deal regardless of the terms being adjusted. As a result, IAG no doubt sees pushing through with this as a waste of resources and there to be better options available.

IAG To Move Towards TAP?

Despite frustrations over an Air Europa deal not going through, IAG isn’t stopping with its interest in a planned takeover eventually. The Group appears to be actively seeking TAP from Portugal as part of new acquisition plans.

While considerable efforts will still be needed to get regulatory approval for this deal, analysts argue that TAP may just emerge as a greater option moving forward.