International Airlines Group (IAG) (IAG) reportedly reached an agreement to buy Air Europa for €500 million ($612.5 million), with payment to be postponed until 2026.

The unnamed sources reported that the IAG has agreed to a deal to buy Spanish carrier Air Europa for €500 million on December 18, 2020, according to the Spanish newspaper El Confidencial. 

In November 2019, IAG initially agreed to buy Air Europa for €1 billion ($1.2 billion). However, due to the economic downturn caused by the COVID-19 pandemic, British Airways parent company IAG has been pushing to reduce the price.

In October 2020, CEO of International Airline Group Luis Gallego said the group was still interested in buying Air Europa. “For sure if possible, we would like to do this deal,” Gallego said. “We are waiting to see the package and the conditions attached, and at that moment, we will continue the negotiation.”

The purchase of Air Europa would further expand the IAG network, as the group already controls a significant part of the Spanish airline market, owning Iberia and Vueling airlines.  

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International Airlines Group (IAG) and the struggling Air Europa reportedly reached an agreement for a reduced purchase price of less than half of the initial €1 billion.