Air France-KLM ‘In Talks to Buy Stake in Air Europa’

Wedoany.com Report-Nov 28, Air France-KLM is in discussions to acquire a 20% stake in Spanish airline Air Europa, according to Spanish media.

The potential investment is seen as an opportunity for Air France-KLM to strengthen its position in southern Europe and enhance its transatlantic network, particularly towards Latin America and the Caribbean.

The move follows Air Europa’s recovery from financial challenges during the pandemic and aligns with ongoing industry consolidation.

It also comes after IAG’s failed bid for the Spanish carrier, which operates domestic, regional and long-haul services.

Initial expressions of interest are expected soon, with a decision on technical details anticipated by the end of November.

ElEconomista.es reported that a 20% stake in Air Europa’s would avoid involvement by the competition regulator. At the same time, it would provide a capital injection to the company that is struggling with high debt.

The amount of the transaction is still to be specified, although ElEconomista.es reported it would exceed the €100 million paid by IAG in 2022 for its 20% stake, given the improvement in Air Europa’s operating result.

In 2023, Air Europa’s revenues rose by 18% to €165 million. This year, the carrier hopes to raise that figure to between €180-200 million.