BA parent IAG keen to buy Air Europa; partners with Qatar Airways

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International Airlines Group (IAG) (IAG), the parent group of British Airways, Iberia, Aer Lingus and two low-cost brands LEVEL and Vueling, is no exception to the difficult situation surrounding the industry. The group, however, indicated that it is still keen to complete its purchase of Air Europa.

IAG announced the agreement in November 2019. The price was set to be $1.1 billion (€1 billion) in cash, as the airline group aimed to create a rival hub to the top four European airports, namely Amsterdam Schiphol (AMS), Frankfurt Airport (FRA), London Heathrow (LHR) and Paris‘ Charles De Gaulle (CDG). Back then, the company was hoping to complete the purchase by H2 2020, subject to regulatory approval.

However, as the coronavirus-related travel lockdowns were enacted around the world and airlines faced a cash crunch, rumors began to spread that IAG might look to cancel or defer the acquisition. The purchase is still pending approval by regulatory authorities, including the European Commission.

Willie Walsh, the chief executive of the group, squashed the rumors during the company‘s Q1 2020 earnings call. Walsh mentioned that IAG is still going through the “full competition regulatory approval process.”

“So at this point, the process continues.”

Nevertheless, the airline group is a step closer to opening another link between Europe, Qatar and Australia. On May 7, 2020, the Australian Competition & Consumer Commission (ACCC) approved the proposed codeshare agreement by British Airways and Qatar Airways. The codeshare agreement is set to be valid for the next five years and is set to come into effect on May 29, 2020, if no party makes a complaint to the Australian Competition Tribunal.

The Australian authorities received the application for the codeshare on January 6, 2020.The two carriers were asking for approval to codeshare nine routes from the United Kingdom to Australia, with a stop in Doha, Qatar, excluding Sydney Airport (SYD), as a destination or origin point.

British Airways and Qatar Airways had highlighted that the nine routes are highly competitive. Airlines like Qantas and Emirates, Etihad and Virgin Australia, are also sharing their flight numbers on flights from Australia to Europe. Furthermore, such airlines as China Southern, China Airlines and Singapore Airlines (SIA1) (SINGY) offer passengers to transit via their hubs to Europe and vice-versa.

 

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