The European Commission has said that talks with airline groups IAG and Globalia on a proposed acquisition in Spain were not able to address competition concerns.

IAG, which owns Aer Lingus, as well as Iberia and Vueling in Spain, said yesterday (1 August) that it had terminated an agreement with Globalia to buy the remaining 80% of Air Europa that it did not already own.

IAG’s board said that it would not be in the best interests of shareholders to continue with the deal “in the current regulatory environment”.

Remedies

Noting the IAG statement, competition commissioner Margrethe Vestager said that its analysis had indicated that the merger would have negatively affected competition on a large number of domestic, short-haul, and long-routes within, to, and from Spain on which the two airlines competed closely.

“IAG offered remedies but, taking into account the results of the market test, the remedies submitted did not fully address our competition concerns,” she added.

The commission opened an investigation into the deal in January.

‘Greater challenge’

It was the second time that the commission had assessed the acquisition, after the first attempt failed in 2021 due to similar concerns.

“Air Europa is in a stronger position today than it was in 2021, so the challenge of identifying adequate remedies was even greater than in 2021,” said Vestager.

IAG will continue to hold a 20% stake in Air Europa.