Rudolph Angler European airlines are increasingly pursuing consolidation strategies to strengthen their competitiveness and expand their networks. One of the key players in this trend is Air France-KLM.
Air France-KLM’s Interest in Air Europa
Air France-KLM has shown interest in acquiring a stake in Air Europa, with Globalia, the owner of Air Europa, confirming the talks on Wednesday. However, no final agreement has been reached yet.
The potential deal was reported by Spanish newspaper El Economista, which noted that Air France-KLM is in discussions to purchase up to a 20% stake in Air Europa. The value of this stake could exceed the €100 million IAG paid for a similar share in 2022.
Implications and Concerns
The deal would likely not require approval from the European Union due to the relatively small stake involved. The potential partnership could provide Air Europa with much-needed capital, despite having posted a net profit of €165 million in 2023. Air France-KLM would benefit by strengthening its presence in southern Europe and expanding its access to Latin American markets.
This interest comes after IAG, which owns British Airways and Aer Lingus, abandoned its own bid for Air Europa in August due to regulatory pushback. The European Commission had raised concerns over the impact on competition, fearing that the deal could lead to higher fares for passengers.
Growing Airline Consolidation in Europe
Consolidation in the European airline industry is on the rise, though it faces regulatory challenges. Ryanair CEO Michael O’Leary has urged the European Commission to approve these mergers, arguing that smaller carriers are struggling to survive. IAG’s CEO Luis Gallego echoed this, stating that without consolidation, many European airlines could fail.
Despite the setback with IAG, Air France-KLM has continued to expand, acquiring a 19.9% stake in Scandinavian Airlines (SAS) earlier this year. Similarly, Lufthansa is investing in Italy’s ITA Airways, signaling a shift toward further consolidation in the region.