Lufthansa and Air France-KLM cool interest in Air Europa but keep door open to negotiations
Lufthansa Group and Air France-KLM have paused efforts to acquire a stake in Spanish airline Air Europa, according to a May 21, 2025 report by Spanish newspaper El Confidencial. The main reason behind this cooling of interest lies in the price the airline’s owners, the Hidalgo family, are asking for a portion of the company.
Recent negotiations focused on a 25% stake in the Palma de Mallorca-based carrier, for which Air Europa was demanding €240 million—a valuation both European airline groups consider excessive. Both the Franco-Dutch and German groups cited disagreements over Air Europa’s overall valuation as the key reason for the current standstill. The Hidalgo family values the airline at approximately €1 billion.
Sources close to the negotiations say the family urgently needs liquidity to meet the repayment of a €475 million government loan due in November 2026, along with other outstanding debts. Although Air Europa is currently operating in the black, it continues to face persistent financial challenges.
Despite this setback, El Confidencial reports that talks are not entirely off the table. Both Lufthansa Group and Air France-KLM view a stake in Air Europa as a strategic opportunity to strengthen their presence and expand their networks in Latin America and the Caribbean, where Air Europa has a solid route structure.
The possibility remains that either group could acquire an initial stake and expand it later. The Hidalgo family has expressed willingness to sell additional shares. It's worth noting that International Airlines Group (IAG) already owns 20% of Air Europa and is reportedly open to selling its stake as part of a new deal with another buyer.
The current owners face mounting pressure to secure a deal during the European summer. Failing to do so could complicate the airline's financial situation further. Meanwhile, reputational concerns surrounding the Hidalgo family and political sensitivities tied to the state-backed loan to Air Europa are also prompting both airline groups to tread carefully with any investment.
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