IAG to snap up Europa Airlines for €1bn
International Consolidated Airlines Group said on Monday that it has agreed to purchase Air Europa from Spanish travel operator Globalia for €1bn.
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The company, which also owns British Airways, Iberia and Aer Lingus, said the move will transform its Madrid hub into a "true rival" for other other major European airports such as Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle.
IAG will initially retain the Air Europa brand and the company will operate as a standalone profit centre within its Iberia airlines business.
The newly-acquired business currently flies to 69 domestic and international destinations, including European and long-haul routes to Latin America, the United States of America, the Caribbean and North Africa.
Having carried 11.8m passengers with its fleet of 66 aircraft during 2018, the Spanish private airline achieved full-year revenue of €2.1bn and an operating profit of €100m.
The acquisition is currently slated for completion in the second half of next year, following receipt of all relevant approvals.
Iberia chief executive Luis Gallego said: "This is of strategic importance for the Madrid hub, which in recent years has lagged behind other European hubs. Following this agreement, Madrid will be able to compete with other European hubs on equal terms with a better position on Europe to Latin America routes and the possibility to become a gateway between Asia and Latin America."
IAG shares were up 1.4% to 550.20p at 0925 GMT.