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IAG buys Air Europa to strengthen its Madrid hub

Air Europa Boeing 787-8
Air Europa Boeing 787-8, © Boeing

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LONDON - British Airways owner IAG said on Monday it had agreed to buy Spanish carrier Air Europa for 1 billion euros ($1.12 billion) in cash as it set its sights on the market in European travel to Latin America. IAG will tie Air Europa to Iberia to strenghen its Madrid hub operation.

"Acquiring Air Europa would add a new competitive, cost effective airline to IAG, consolidating Madrid as a leading European hub and resulting in IAG achieving South Atlantic leadership," Willie Walsh, chief executive of IAG said.

Adding Air Europa will transform "IAG´s Madrid hub into a true rival to Europe’s four largest hubs: Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle."

"This is of strategic importance for the Madrid hub, which in recent years has lagged behind other European hubs", said Iberia head Luis Gallego. "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."

Air Europa is one of the leading private airlines in Spain, operating scheduled domestic and international flights to 69 destinations, including European and long-haul routes to Latin America, the United States of America, the Caribbean and North Africa.

In 2018, Air Europa generated revenue of €2.1 billion and an operating profit of €100 million. It carried 11.8 million passengers in 2018 and ended the year with a fleet of 66 aircraft. The Air Europa brand will be retained.
© Reuters, | Image: Boeing | 04/11/2019 08:41

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