Union challenges IAG's Air Europa deal at European Commission

Britain and Ireland's biggest trade union is seeking to scupper IAG's €1bn takeover of Air Europa at the European Commission on competition grounds.

Unite said it had contacted Margrethe Vestager, the EU competition commissioner, about its objections to IAG's purchase of the Spanish airline and was in talks with her case team examining the takeover. Unite will act as a third party opposing the deal, it said.

The union criticised IAG's decision to spend about £900m buying Air Europa while cutting up to 12,000 jobs at its British Airways business and stripping back terms and conditions for those workers who remain.

Unite said competition concerns about the takeover included IAG's increasing dominance of flights from Europe to South America, its powerful position at Madrid-Barajas airport and the group's return to a monopolistic hold over the Spanish domestic market. The takeover would allow IAG to drive up ticket prices and reduce the number of flights on some routes, Unite said.

Sharon Graham, Unite executive officer, said: "Unite is questioning why IAG is seeking to fire and rehire the workforce at BA while its parent IAG is ploughing ahead with buying an airline for over €1bn.

"The case team at DG [directorate general] competition have been very open to us sharing our concerns with them. We are now gathering further detailed evidence from a number of expert sources and discussing the takeover with other parties that could be negatively impacted. We are confident that we have a strong case and we look forward to officially presenting all our evidence when Phase I of the investigation begins.”

Shares of IAG fell 5.7% to 272.15p at 10:53 BST.

IAG, which owns the Iberia and Vueling Spanish carriers, announced its purchase of Europa in November and said the deal would transform its Madrid hub into a true rival to other European airports such as London Heathrow and Frankfurt. The deal was due to be completed in the second half of 2020.

The company has resisted political pressure to halt its planned job cuts at BA despite taking millions of pounds in UK government support during the Covid-19 crisis. Unite has criticised the company for cutting BA jobs while leaving the workforce at its Spanish business intact.

IAG has said it is burning through £178m a week because of the shutdown of air travel during the coronavirus emergency. It has said BA's survival is under threat and is seeking to raise millions of pounds by selling several of BA's valuable artworks.