British Airways is set to buy Air Europa for $1.1 (KSh113.3) billion. Acquisition of the private Spanish airline is a move that seeks to turn Madrid’s airport into a global aviation hub. It will position it better against rivals London, Paris and Frankfurt.
According to International Consolidated Airlines Group (IAG), Air Europa will retain its brand. The company runs as a standalone business.
The overall process will be handled by Iberia. IAG owns the national airlines of Britain, Spain (Iberia) and Ireland (Aer Lingus).
“Following this agreement, Madrid will be able to compete with other European hubs on equal terms. It will also have a better position on Europe to Latin America routes. There is also a possibility for it to become a gateway between Asia and Latin America,” Luis Gallego, chief executive of Iberia, said in a statement.
A research note furthermore projects that the acquisition will increase IAG’s share of passengers flying between Europe and Latin America from 19% to 26%.
The deal is thus expected to be completed by the second half of next year, said IAG.
Air Europa is the third-largest Spanish airline after Iberia and Vueling. Its headquarters are in Llucmajor, Spain. Its main hub is at Adolfo Suárez Madrid–Barajas Airport with secondary focus cities at Palma de Mallorca Airport and Tenerife North Airport.
Air Europa flies to over 44 destinations around Spain, Europe, South America, North America, the Caribbean, and Morocco.
British Airways, which is listed on the London Stock Exchange, is the flag carrier airline of the United Kingdom, and the second-largest airline in the United Kingdom, based on fleet size and passengers carried.