Europe’s airlines are increasingly pursuing consolidation to enhance competitiveness and expand networks. This trend is highlighted by Air France-KLM’s interest in purchasing a stake in Air Europa.
Ongoing Discussions and Potential Deal
Franco-Dutch airline group Air France-KLM has expressed interest in acquiring up to a 20% stake in Air Europa, owned by Spanish group Globalia. The deal, however, has not been finalized. Globalia confirmed the interest but stated, “nothing is closed” yet.
Reports suggest that Air France-KLM’s stake would be valued higher than the €100 million IAG paid for a similar share in 2022. However, due to the size of the stake, the transaction would likely not require European Union approval.
Strategic Benefits and Market Expansion
Despite posting a net profit of €165 million in 2023, Air Europa could benefit from an investment by Air France-KLM, which would help strengthen its financial position and expand its presence.
For Air France-KLM, this move would enhance its foothold in southern Europe and offer better access to the Latin American market.
IAG’s Failed Bid and Broader Industry Trends
This development follows IAG’s failed bid for Air Europa in August, which was blocked due to regulatory concerns. The European Commission raised issues about potential anti-competitive effects, even after IAG offered concessions.
The broader trend in Europe is toward airline consolidation, although fears of anti-competitive behavior continue to slow many deals. Both Ryanair’s CEO Michael O’Leary and IAG’s Luis Gallego have emphasized the need for consolidation to help smaller carriers compete against larger players.
Air France-KLM has already acquired a 19.9% stake in Scandinavian Airlines (SAS), while Lufthansa is pursuing a stake in Italy’s ITA Airways.