Fusiones y Adquisiciones

✈ Madrid's Adolfo Suárez Madrid-Barajas Airport boasts the most direct routes to major Latin American cities of any European airport. Iberia's now-failed project to absorb Air Europa aimed to transform its Madrid hub into a mega-hub, rivaling those in Paris-Charles de Gaulle and Frankfurt, to bridge the Americas and Asia. The integration would have facilitated easier connections from Latin America to Asia.

🛫 Margrethe Vestager, Danish EU Commissioner since 2014 and former Deputy Prime Minister, has twice blocked the merger of Spain's two largest airlines, Iberia and Air Europa, at Madrid's Adolfo Suárez Airport, where they would have controlled about 60% market share. The decision maintains Barajas Airport as a second-tier hub compared to Paris and Frankfurt. Despite concessions from Iberia, concerns over higher fares and post-service issues prevent the creation of a Spanish airline giant, fostering an eternal duopoly with Iberia and Air Europa. Air Europa, backed by the Spanish State as a creditor and potential shareholder, can survive financial turmoil, while IAG's five-year effort to develop a significant hub in Madrid like British Airways has in London-Heathrow remains unfulfilled.

🛫 Air Europa, led by Juan José Hidalgo, faces financial challenges with its potential profitability overshadowed by debts of nearly €1 billion, including a €240 million state loan that may convert to equity. Hidalgo must coexist with Iberia, which holds a 20% stake, and the possibility of SEPI involvement, further complicating prospective acquisitions by Air France-KLM or Lufthansa due to the lack of apparent operational value and market concerns, despite Hidalgo's successful divestments of other Globalia divisions.

🛫 Wizz Air, Hungary's low-cost airline, projects 2023 revenues of €350-450 million, falling short of the expected €500-600 million. This resulted in an 18% stock market value drop, the largest since the pandemic. To maintain service on popular routes, the airline leased planes with crews due to Pratt & Whitney engine repairs, incurring significant costs. The engine manufacturer may cover some losses, with issues persisting for 2-3 years. CEO Joszef Varadi anticipates ceasing plane rentals by summer's end, lessening financial impact.

🏩 Juan José Hidalgo, presidente de Globalia, expressed joy over the failed acquisition of Air Europa by Iberia, which he sees as beneficial for competition in Spain and specifically Madrid. The nearly five-year negotiation concluded without a deal, which Hidalgo believes will save Spanish citizens money. He promises Air Europa will continue to compete with IAG, who has received government support. Hidalgo states Air Europa will repay its ICO loan soon, holds over €250 million in bank funds, and plans to renew its fleet, including adding 787-900 aircraft and updating 737-800s, forecasting the repayment of SEPI debt within two to three years.

🛫 Iberia's strategy to integrate Air Europa aimed to boost Barajas as a hub to Asia. Geopolitical tensions, such as wars between Russia and Ukraine, conflicts involving Israel, Hamas, and Hezbollah, and China's economic slowdown, challenged the project's immediate viability. European airlines' flights to Asia are hindered by Russia's airspace closure, giving Asian airlines a competitive edge. Iberia surprised with new routes to Doha and a return to Tokyo on October 27, 2024, after ceasing operations in 2020 due to the pandemic. However, the Russian invasion of Ukraine, turmoil in the Middle East, and China's economic fragility pose obstacles to Madrid Airport's growth as a hub between America and Asia.

🛫 Grupo Abra and Spanish airline Volotea terminated their agreement on June 25 to acquire Air Europa routes from IAG, after Iberia informed the European Commission it would not purchase Air Europa. Volotea, led by Carlos Muñoz, aimed to establish a strong base in Madrid, serving over 130 destinations in Latin America and the Caribbean, plus 20 in Europe starting in the first quarter of 2025. The deal's collapse forces Volotea to continue its growth organically through new aircraft and routes.

✈️ Iberia's potential failure to acquire Air Europa may soon be confirmed due to European Commission obstacles. The failed integration could significantly impact the Spanish economy, including a potential €50 million indemnity to the Hidalgo family. Barajas Airport's hub stature is at risk, threatening Spain's business competitiveness and tourism, which accounts for 15.2% of the GDP. Paris leads with 139 intercontinental destinations, while Madrid has 80, aiming for 100. IAG's thwarted plans included 850-1,000 new flight combinations, job creation (1,250-1,800 positions), a €30 million annual increase in Madrid Airport's revenue, and an additional 16,000 tonnes of cargo traffic.

✈ Iberia communicated to Air Europa's main creditors that, given Brussels' reluctance to accept its concessions, it currently leans towards abandoning the acquisition, as multiple sources reported to Preferente. IAG, which holds 20% of Globalia, could openly discuss its intentions soon, wary of a €50 million indemnity pact with the Hidalgo family. The potential deal, once poised to be Spanish aviation's largest, faces collapse amidst concerns over business competition, service quality, Lufthansa's pressure, and a Qatari majority in IAG.

✈ Airbus, the world's largest airplane manufacturer, reported profits in the first six months of the year but saw a 50% decline compared to the same period last year, with 989 million euros counted as expenses by Space Systems subsidiary. Excluding this, Airbus's profits were slightly lower than two billion dollars, contrasting with Boeing's losses. Sales rose by 4% to 28.800 million euros. CEO Guillaume Faury cited space business variations and supply chain issues affecting deliveries, with 327 orders received and 8,585 aircraft pending delivery.