By Aurelia Munoz •
Updated: 28 Nov 2024 • 10:55 • 2 minutes read
The rules of the game in the European airline industry could be about to change with the intentions of the French-Dutch group Air France-KLM to acquire a 20 per cent stake in the Spanish airline Air Europa.
This operation would position Air France-KLM as a strategic industrial partner for Air Europa strengthening its presence in the Spanish market and consolidating its connections to Latin America.
Air Europa, owned by the family group Globalia with base in Llucmajor, is seeking to raise liquidity through a capital increase. This initiative follows the failure of the merger with IAG (owner of Iberia and British Airways), which was rejected by the European Commission due to competition concerns. Despite this, IAG retains a 20 per cent stake in Air Europa which was acquired for more than €100 million during the pandemic.
The price of the new transaction could exceed this figure, considering Air Europa s financial improvement in recent years. In 2023, the airline increased revenues by 18% and achieved a record profit of €165 million, with expectations to raise it to between €180 million and €200 million this year thanks to strong travel demand.
Air France-KLM strengthening its presence in the Spanish market and Latin America
The addition of Air France-KLM as a shareholder, besides the financial benefit, would also open the door to new strategic alliances. The two airlines already collaborate within the SkyTeam alliance and through codeshare agreements. The Franco-Dutch group could also facilitate connections with other partners, such as Delta Air Lines or the recently acquired 19.9% stake in Scandinavian Airlines (SAS).
In anticipation of this potential acquisition, an agreement was signed in October 2023 assigning Air France s maintenance subsidiary (AFI KLM E M) responsibility for the maintenance of Air Europa s Boeing 787 aircraft as of March 2025. This agreement also provides for the creation of a maintenance base in Madrid, representing a significant expansion for Air France-KLM in Spain.
The current plan envisages Air France-KLM acquiring a 20% stake in Air Europa, which would avoid the need for approval by the EU regulator. This operation would allow the Spanish airline to improve its financial situation, which is marked by the urgency of refinancing its debt. Of the €141 million loan granted by the ICO in 2020, €124 million has already been repaid, but the SEPI bailout, valued at €475 million, is still pending.
On the operational side, Air Europa s fleet currently consists of 54 aircraft, including Boeing 787s for long-haul flights and 737s for short-haul flights. The airline plans to expand its fleet to 60 aircraft through leasing contracts, which will strengthen its capacity to meet growing demand.
Although Air France-KLM has confirmed that it is in discussions about possible commercial cooperation with Air Europa within the SkyTeam framework, it has not yet openly declared its participation. Neither Air Europa nor Globalia have issued official statements.
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