IAG Bid to Buy Air Europa Could Harm Competition, EU Says
IAG—which houses British Airways, Iberia and Vueling among others—agreed with Air Europa in February last year on a full acquisition valued at €400 million
International Consolidated Airlines Group’s proposed $427.7 million acquisition of Air Europa could reduce competition, the European Union said late Friday.
The European Commission—the legal arm of the EU—said the deal could restrict competition in the market for passenger air-transport, in particular for routes within, to and from Spain.
IAG IAG 0.09%increase; green up pointing triangle—which houses British Airways, Iberia and Vueling among others—agreed with Air Europa in February last year on a full acquisition valued at 400 million euros ($427.7 million).
The commission is concerned that customers could face increased prices and decreased quality of services following the transaction, it said.
It has issued a statement of objections—a formal step in an investigation where the parties are informed in writing of the concerns.
To address the concerns, IAG is working on remedies that creates a more competitive market and benefits consumers, it said in a statement.
“Compared with the remedy package we submitted in our previous attempt to acquire Air Europa, we are doubling our offer in terms of divested capacity,” it said.
IAG can submit remedies at any time in the proceedings until the remedy deadline on June 10.