IAG considers that the purchase of Air Europa and its synergies with Iberia will be decisive for Spain to have an important hub in Madrid, an international reference and waiting for the expansion of the Barcelona airport, to compete face to face with Paris and Rome for connections with Latin America. It is within this business framework that the London-based group has decided to make a move and close the agreement with Globalia this week after a failed attempt in the past. Now the "uncertainty" has disappeared, but the approval of the CNMC and, mainly, of the European Commission is needed, an issue that is expected to be saved by mid-2024.
The IAG group assured yesterday that it is a decisive moment for aviation in Europe. Its objective is that the Barajas airport does not lose ground in the race that the large companies in the continental sector have already started, betting on Rome, in the case of Lufthansa, and Paris, in the case of Air France. And that ability to compete with the giants of the sector will be one of the arguments that it will use before the authorities in Brussels, they explain from the airline directed by Luis Gallego.
The purchase of Air Europa, punished yesterday on the stock market with a 6.5% drop in the IAG share - although its leadership downplayed the decline, arguing that the share had risen 30% since last year -, is considered by IAG a "country operation" with which the group will try to turn the Madrid hub into a point of reference in air traffic with Latin America. If the operation is not closed, the flights "will go by other routes," the company warns.
In this competition for routes to South America and the Caribbean, Lufthansa has emerged, which has launched itself to take over Ita Airways, the successor to Alitalia, with the aim of boosting Fiumicino on routes to the other side of the Atlantic, and Air France, which also aspires to occupy that place. "It is important to be strong in this competition," they add from IAG.
The Government has been interested in the purchase of Air Europa by IAG. At the end of last year, the Presidency called a meeting with the first swords of both companies to find out the evolution of the conversations that have crystallized this week. Both airlines now trust that the Executive will collaborate actively in the negotiations that are opening with Brussels, specifically with the team of the Competition Commissioner Margrethe Vestager. "This is an acquisition that has a lot of advantages for consumers," anticipated yesterday the CEO of Iberia, Javier Sánchez-Prieto.
The main executive of the company also ruled out a restructuring of personnel after the purchase of Air Europa, an issue that worried Moncloa and the Economy. "There is no one left over," Sánchez-Prieto advanced.
IAG presented its 2022 results yesterday, returning to profits after the pandemic. The group earned 431 million last year, thus recovering the positive result after losing 9,856 million in the last two years. Profitability, however, is still a third of that obtained in 2019.
All IAG airlines obtained profits in the year of recovery, highlighting Iberia, which earned 382 million, and Vueling, with 187 million. British Airways, the jewel in the crown, made 322 million in profits and Aer Lingus, 45 million.
The strong demand from travelers and the recovery of traffic were, according to Gallego, the reasons why IAG's revenues skyrocketed to 23,066 million, which meant multiplying by 2.5 those achieved in 2021, when it entered 8,455 million. In this sense, he highlighted the notable increase in tickets, passenger tickets, which led the group to enter 19,458 million, compared to 5,830 million the previous year. Of the total income, 5,511 million correspond to Iberia.
The recovery in revenue did not prevent the airline group from having to face increased costs in various aspects last year. Expenditure on fuel and emission rights tripled, reaching this item to 6,120 million, and landing and emission fees doubled, reaching 1,890 million euros.
The group's net debt was also reduced by 1,282 million, reaching 10,385 million euros as of December 31, 2022.
Despite the return to profits, IAG is not yet contemplating returning to the dividend during 2023.
