EU begins in-depth study of IAG's plans to buy Air Europa

The European Commission said on Tuesday that it has launched an in-depth investigation into the planned purchase of International Airlines Group by Spain's Air Europa.

The Commission, which oversees EU antitrust policy, said it fears the proposed deal would reduce competition on Spanish domestic routes and on international routes to and from Spain.

In response, the IAG said the deal will enhance Madrid's competitiveness and benefit consumers, adding that it will continue to work with the European Commission.

An EU spokesman said he has 90 working days until November 5 to make a decision and that airlines have decided not to provide potential remedies during the initial investigation.

“IAG, which, in particular, operates Iberia and Vueling flights, and Air Europa are the leading airlines in Spain. They are also key providers of communications between Spain, the rest of Europe and Latin America, ”said Commission Executive Vice President Margrethe Vestager. ...

“We will carefully assess whether the proposed deal will affect competition on domestic, short and long haul routes to /from Spain, which could lead to higher prices and lower quality of service for travelers,” she continued.

She added that while the financial position of many airlines is still fragile, it is important that the sector's recovery takes place in a competitive environment, while maintaining customer choice.

IAG, which owns British Airways and Iberia, agreed to buy Air Europa for € 500 million ($ 594.75 million) in January after the pandemic halved its starting price and IAG struck a six-year grace period.

“We believe this deal promotes competition and benefits customers, employees, and the Spanish economy and connectivity,” IAG said in a statement. "This deal remains strategically important for the future of IAG and Iberia, and we continue to work with the European Commission."

An EU investigation could delay the completion of the deal, which the IAG hoped would take place in the second half of this year.