Business · Companies · 5 hrs ago
IAG stays out as European airline consolidation advances
IAG, the owner of Iberia, Vueling and British Airways, is staying out of a new round of airline deals in Europe.
Lufthansa won the process to buy a stake in Portugal’s TAP, after taking a stake in Italy’s ITA, while Air France-KLM is seeking a larger share of Scandinavian carrier SAS.
IAG previously tried to buy Air Europa, but faced opposition from the European Commission, and it withdrew from the TAP process on April 2.
Chief executive Luis Gallego says IAG will pursue consolidation only if it can control a company and restructure it to meet its profitability targets.
An analyst expects IAG to grow by adding routes as rivals withdraw from key hubs, especially Madrid and Heathrow.
Apollo has launched a £5.7 billion offer to take easyJet private, adding a private-equity investor to the European airline market.
Lufthansa is in talks with Portugal’s government about buying its remaining stake in TAP, but regulatory hurdles lie ahead.
Lufthansa won the process to acquire a stake in Portugal’s TAP, while IAG remains outside the latest wave of European airline consolidation.
IAG withdrew from the TAP process on April 2 after previously trying to buy the airline.
IAG chief executive Luis Gallego says the group still aims to consolidate the sector, but not at any price.
Analyst Alex Irving says IAG may grow organically by filling gaps left by other airlines at its Madrid and Heathrow hubs.
Air France-KLM is seeking to increase its stake in SAS, while US investment fund Apollo has launched a takeover offer for easyJet.
- Who
- IAG, Lufthansa, Air France-KLM and Apollo are among the groups involved in European airline consolidation.
- What
- Lufthansa won the process to acquire a stake in TAP. IAG is not participating in the latest consolidation moves.
- When
- Lufthansa won the TAP process on October 14; IAG withdrew from it on April 2. The year for these dates is not stated.
- Where
- The developments concern airlines in Europe, including Portugal’s TAP, Germany’s Lufthansa and British airline easyJet.
- Why
- IAG says it will pursue consolidation only if it can control and restructure a company to meet its operating-profitability targets.
This story does not have two clearly opposing sides.
Lufthansa took a 41% stake in ITA for 325 million euros.
IAG withdrew from the process to acquire TAP.
Lufthansa agreed to pay another 325 million euros for a 49% additional stake in ITA.
Lufthansa won the process to acquire Portugal’s TAP.
- IAG first-half profit
- 1.033 billion euros
- IAG net debt
- 4.692 billion euros
- Lufthansa offer for TAP stake
- 1.025 billion euros for 44.9%
- Apollo offer for easyJet
- 5.700 billion pounds
- IAG operating-profitability target
- 12% to 15%
What people are saying
not at any price
Its role in sector consolidation will be through organic growth [filling the gap left by others] as they exit or partially withdraw from their main hubs [Madrid and Heathrow]