Unite Union Opposes ‘IAG’s’ Air Europa Acqusition

The British Unite union intends to oppose ‘IAG’s’ planned acquisition of Air Europa in front of the European Commission. The union doesn’t believe that the airline group should be spending millions to acquire the Spanish airline. However, it is Iberia that is looking to purchase the airline.

Unite, IAG, Air Europa
Unite is challenging IAG’s takeover of Air Europa. Photo: Getty Images

Airlines around the world have been struggling to work out how to respond to the pandemic induced crisis. Many major deals were pending entering the disaster. Earlier this year, we saw LOT Polish Airlines’ owner drop its bid to purchase German carrier, Condor. However, for the time being, Iberia has stood by its decision to purchase Air Europa.

The union is unhappy

The Unite union represents some cabin crew and ground staff at British Airways. The union is unhappy with the British flag carrier’s consultation for up to 12,000 job losses across the airline. As a result of its discontent, the union has informed the European Commissioner for competition, Margrethe Vestager, that it wishes to oppose ‘IAG’s’ deal.

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The union’s main opposition stems from the fact that it believes an acquisition would give the International Airlines Group a monopoly over the Spanish domestic market, as well as domination of Madrid’s main airport and routes to South America. It believes that these actions will drive ticket prices up and reduce flight frequencies.

Iberia intends to purchase the airline. Photo: Getty Images

Commenting on the matter, a Unite executive officer said,

“Unite is questioning why IAG is seeking to fire and rehire the workforce at BA while its parent IAG is ploughing ahead with buying an airline for over €1 billion.”

About the deal

As mentioned in an earlier paragraph, it is not IAG that is purchasing Air Europa, but rather one of its airlines, Iberia. Commenting in an interview with Sky News earlier this week, the group’s CEO, Willie Walsh, said,

“The acquisition will be made by Iberia… not a single penny of British Airways money will go towards that acquisition… If the Iberia/Air Europa merger goes ahead, it’s not going to in any way impact on the people at British Airways.”

The deal to purchase Air Europa was first signed in early November, long before the current crisis began. At the time, it was worth €1 billion ($1.14 billion). However, in April, Simple Flying reported that the group was seeking a lower purchase price for the airline.

British Airways, Airbus A380, Flight Hours
Willie Walsh said the deal would not affect British Airways staff. Photo: Getty Images

By acquiring Air Europa, IAG would have three Spanish airlines alongside flag carrier Iberia and low-cost carrier Vueling. The group previously said that the deal would allow them to consolidate Madrid as a European hub, in addition to unlocking further opportunities for the carrier in the south Atlantic.

The deal came shortly after LATAM announced it would leave the oneworld alliance. It would see Air Europa leaving the SkyTeam alliance.

What do you make of Unite’s objection to the Air Europa takeover? Let us know your thoughts in the comments!