IAG Buys Air Europa For Madrid Hub Expansion
The owner of British Airways & Iberia – IAG has announced that it will be buy its remaining stake in the Spanish carrier Air Europa.
AIG which also owns Vueling and Aer Lingus, forecast operating profit of around 2.3 billion Euros – a billion more than last year, agreed to pay 400 million Euros to Spain’s Globalia for the remaining 80% of Air Europa – a deal aimed at expanding its position in the Europe – Latin American market.
The airline group which is a Spanish registered company with shares traded on the London Stock Exchange and Spanish Stock Exchanges is one of the world’s largest with a combined fleet of 531 aircraft.
That result came in ahead of analyst expectations and represented an improvement of 4 billion euros from the previous year when COVID-19 travel restrictions made airlines across the world loss-making.
Looking ahead, chief executive Luis Gallego said IAG was seeing robust forward bookings, although it remained conscious of the global macro-economic uncertainties.
“We are transforming our businesses, with the intention of returning IAG to pre-COVID levels of profit within the next few years, through major initiatives to improve customer experience and operational performance,” he said.
Luis Gallego, IAG chief executive, said: “2022 was a year of strong recovery, driven by sustained leisure demand and markets reopening.
“At this point of the year we continue to see robust forward-bookings, while also remaining conscious of global macro-economic uncertainties.
“We are transforming our businesses, with the intention of returning IAG to pre-COVID levels of profit within the next few years, through major initiatives to improve customer experience and operational performance.
“Our unique group structure allows us to maximise revenue and cost synergies, and invest capital to achieve strong returns, whilst continuing progress towards net zero by 2050.
Gallego added: “With the acquisition of Air Europa now agreed but subject to regulatory and other approvals which could take around 18 months, we are intending to welcome another leading airline to the Group.
“This acquisition will enable us to grow Madrid as a hub, offering a gateway to Latin America and beyond, with benefits for customers, employees and shareholders.”