The takeover of Air Europa by IAG is still not in the bag. While negotiations are underway, the Spanish airline is reducing its fleet.
Last November, Iberia’s parent company IAG announced its intention to buy Spanish competitor Air Europa. The Corona crisis, however, has changed everything. The takeover price is now said to have fallen to about half of the amount originally agreed upon.
In addition, Air Europa is significantly reducing its aircraft fleet in order to improve its own liquidity. According to the online newspaper El Confidencial, Javier Hidalgo, head of Air Europa and its parent company Globalia, plans to reduce the airline’s fleet from currently 66 aircraft by up to 14 to only 52. This would mean getting rid of about one in five aircraft.
Negotiations with Boeing
It is not yet clear which aircraft the airline will phase out. Air Europa’s fleet includes ATR 72, Embraer E195, Boeing 737-800, Boeing 787 and Airbus A330. Many of the planes are leased.
Air Europa also talks to Boeing about the dates and conditions of outstanding deliveries. The airline expects 20 Boeing 737 Max and another five Boeing 787-9. Due to an expected annual loss of 380 million euros, the Spanish company urgently need to cut costs.
No agreement with IAG yet
A major burden for Air Europa is that the long-haul business to North, Central and South America remains largely idle due to the corona crisis and the outlook is uncertain. That business is where the airline earns a large part of its money. The reduction of the fleet would be in line with IAG’s plans. The group is also reducing it’s other airlines’s fleets.
However, talks are still ongoing. If the takeover of Air Europa does not materialize in the course of the crisis or an agreement is dragged out even further, the reduction of the fleet would probably be all the more important for Air Europa – perhaps even vital for its survival.