The Spanish government could acquire part of Air Europa

The Spanish government is considering the possibility of acquiring a share in Air Europa after the debacle of the purchase of the airline by the IAG group. Though the Spanish group and Globalia, Air Europa’s parent company, have committed to review the possibility of an agreement before the end of the month, the government is considering becoming a shareholder in the Hidalgo family’s airline.

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In mid-December last year, IAG and Globalia announced the definitive termination of the agreement signed on November 4, 2019, according to which Iberia agreed to acquire the entire share capital of Air Europa for €500 million. The financial difficulties of the industry in general and the obstacles put in place by the European Commission’s competition authority were the reasons – among others – for that decision.

Today, according to statements by Nadia Calviño, First Vice President and Minister of Economic Affairs and Digital Transformation, the government is «considering» buying an equity stake in Air Europa. «At the moment we are exploring all possible options,» she told El Pais.

These options include the possibility of the government taking a «minority stake» in the company, sharing ownership of the airline with IAG and the Hidalgo family, the current owners. Thus, the government could acquire up to 40% of the airline’s shares.

See also: IAG and Globalia will evaluate new alternatives to complete the purchase of Air Europa

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Air Europa has received more than 600 million euros from the state in the form of bailouts and economic and financial aid. Among the options being considered by the government is to capitalize part of this debt as shares in the airline.

However, the situation of the sector is not the most favorable for this: Air Europa suffered record losses of 428 million euros in 2020 and everything seems to indicate that in 2021 it will repeat those losses, having recovered only 19% of the traffic recorded in 2020. The aid fund that granted the loan to the airline stipulates in its articles of association that, if it is unable to repay the loan, the state will capitalize on this debt by taking an equity stake in the rescued company.