January 20, 2020 / The International Airline Group (IAG) sealed the deal announced in November 2019 for the acquisition of Spanish carrier Air Europa (UX). Initial price of the transaction, EUR 1 billion, was dropped by half to EUR500 million, equivalent to around USD607 million. Iberia (IB), member of the IAG Group, is the carrier that will have the greatest return from the acquisition, having no more competitors at its Madrid Barajas base, especially on flights to Latin America, where Air Europa boasted a wide number of destinations.
As of the date of the deal Air Europa had a fleet made of 49 aircraft, or 19 fewer than when the acquisition was initially announced, which partly motivates the heavy discount on the final price of the transaction. The number includes 10 Boeing 787-9, 8 Boeing 787-8, 18 Boeing 737-800, 7 Embraer ERJ-195 and 6 ATR 72-500. The 500 million euros will be paid by IAG at the end of the sixth year following the deal, whose completion is expected sometime in the second half of 2021.
According to simpleflying.com, the financially troubled carrier has lease liabilities for some EUR1.5 billion and in 2019 had a revenue of EUR2.1 billion, an operating profit of EUR71 million and a pre-tax profit of EUR42 million. This was before the airline was hit by the Covid pandemic, which cut its passenger volume by 70% in 2020. (Photo Wikimedia Commons / Guahoo)