Well, now it’s official. Spain’s two major airlines will become one. Back in 2019, the International Airline Group (IAG), the parent company which owns British Airways, Iberia, Aer Lingus, and Vueling, announced it will acquire AirEuropa on behalf of Iberia. The cost agreed upon was one billion euros, give or take. Air Europa was hemorrhaging money for quite some time and desperately needed a bailout.
Since that 2019 announcement, the airline industry has gotten crushed financially from the pandemic. Apparently, that was a great opportunity for IAG. IAG just released the final details of this acquisition and will now pay only €500 million–half the cost of the original deal.
Bottom Line
I’m generally skeptical about large companies merging and reducing competition. This often has a negative effect on the consumer who ends up paying more for products/services. Time will tell. I’m happy for the thousands of Air Europa’s employees who will be absorbed into the Iberia workforce. Their employment with the failing Air Europa was certainly up in the air (no pun intended).
What do you think of this merger?
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