Iberia proposes to World2Fly to cede long-haul business and pave the takeover of Air Europa

Iberia will present to the European Commission a second remedy to facilitate the approval of the purchase of Air Europa, operation under the magnifying glass of the Community Competition body. It is an agreement with the young airline World2Fly, of the group Iberostar, to assign assets in the business of long-haul flights in the event that it is necessary to avoid dominance positions.

The memorandum of understanding could include slots or routes, among other interests of Iberia and Air Europa. With this, World2Fly, which intends to operate A350 and A330 aircraft once mobility restrictions are lifted, could win positions in Madrid-Barajas. But the choice of this candidate must pass the Brussels exam.

The agreement, like the one signed with Volotea in March 2020, anticipates any requirement from the EC and could include the transfer of slots or routes

The news, confirmed by Iberia, has been advanced by the specialized website Preferential, with statements from the CEO of World2Fly, Gabriel Subías. Iberia already signed in March of last year a first agreement with Volotea through which it will yield routes of short and medium radius and slots, both yours and Air Europa, to pave the way for the EC.

The patch before the wound

Both agreements with Spanish competitors are based on the model Fix-it First remedy, (pre-arrangement solution) anticipating the request of any remedy by the Competition Commission. In this case, Volotea estimated that it could open between two and four bases in Spain, in addition to consolidating its pre-crisis bases, while winning slots in different Spanish airports. Volotea’s growth would occur in Canary Islands, Balearic Islands, Galicia, Euskadi and Asturias.

The main obstacle to Air Europa’s takeover may be a excessive concentration of market share on both domestic and Latin American routes. The President of Iberia, Javier Sánchez-Prieto, said yesterday at the Hotusa Explora Forum that “there are Spanish airports with more than 100 airlines operating. The integration of Iberia and Air Europa would result in adding shares of 15% and 6%, compared to 29% of the traffic that Ryanair has in Spain ”. The executive once again defended the integration of Air Europa into IAG as a step that will reinforce the Madrid-Barajas hub.

Before the pandemic, the sum of Iberia and Air Europa was 63 long-haul aircraft, within reach of the 65 of KLM and still far from the European giants Air France, Lufthansa or British Airways.

Volotea It started its operations in 2012 with its main base in Asturias and offices in Barcelona. Its fleet consists of 40 Airbus aircraft and before the pandemic it served 319 routes (88 domestic) in 14 European countries.

World2FlyFor its part, it received its first aircraft last January, an A330-300 previously operated by Air Europa. This will soon be exchanged for an A350. His plan is to operate three long-haul planes from Madrid and Lisbon. And its first objective is to connect the Peninsula with the Dominican Republic, Mexico and Havana.

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