Walter Finch
The owners of British Airways have been advised to swerve the acquisition of Air Europa, Spain’s third-largest airline, and let the company ‘fail and go under’.
The fall of the Mallorca-based airline would potentially see the loss of 6,000 jobs, mostly in the Madrid area.
Analysts at British behemoth Barclays Bank made the recommendation in a hard-hitting report to the chiefs of International Airlines Group (IAG), which also owns Spanish airline Iberia.
The report, which also slams IAG’s ‘lack of strategic clarity’, might ruffle feathers among IAG executives for an acquisition that has been in the pipeline since 2019.
They are thought to view Air Europa as a wise purchase as part of a strategy to strengthen Iberia in the Madrid Barajas hub.
Barclay’s report highlights Air Europa’s ‘financial problems’ and warns that its high debt levels would send the massive airline group, which also owns Aer Lingus and Vueling, further into the red.
They also believe that there is little to gain by absorbing Air Europa’s slots in Madrid Barajas since these flight rights are not restricted.
Iberia has until March 31 to negotiate exclusively for the acquisition of Air Europa.
Both parties are continuing negotiations to reach an agreement that must pass the competition authorities’ filter.
Iberia aims to have the deal closed before the deadline.
However, if there is no agreement by then, Iberia’s CEO, Javier Sánchez-Prieto, said they would make their future strategy public.
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