British Airways: Owner IAG shells out £352m to sweep up remainder of Spanish carrier

British Airways’ owner International Airlines Group (IAG) will pay €400m (£352m) to Spanish firm Globalia for the remaining 80 per cent stake of its Air Europa carrier. 

IAG said the move will allow it to tap into the Latin America and Caribbean market as well as to increase ties to Asia. 

The owner of Britain’s flagship carrier previously snapped up a 20 per cent equity stake in Air Europa last August, as airlines experienced an uptick in travel demand post-pandemic.

As part of the deal, Air Europa will maintain its brand but will be managed by Iberia, another airline owned by IAG. 

The Anglo-Spanish airline giant also said the deal will deliver “significant customer benefits” including travellers gaining access to IAG’s Avios loyalty scheme.

The deal is expected to close in 18 months and will comprise of a €200m (£176m) pay up upon closing, followed by a further €100m (£88m) payable in cash on each of the first and second anniversaries of closing.

Luis Gallego, IAG´s chief executive, said: “This agreement will enable IAG’s Madrid hub to compete on an equal footing with other European hubs and consolidate its position in the South Atlantic. 

“Madrid is the main gateway between Latin America and Europe and there are opportunities to expand its network, providing significant benefits to our customers, employees and shareholders.”

It comes as the airline group is beginning to find its feet after travel demand has returned to post-pandemic levels. 

In October, the London-listed firm posted  profit after tax of £751m (€853m) in its Q3 update – after previously revealing a 2021 loss of £505m (€574m).

At the time, the airline consortium also added that planned capacity for 2023 will be at 95 per cent of 2019 levels, depending on how the outlook for demand develops.

“All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover,” Gallego said.