‘Let it fail and sink’ Iberia warned about the purchase of indebted Air Europa

The owners of British Airways have been advised to abruptly reroute the acquisition of Air Europa, Spain’s third-biggest airline, and let the company “go bankrupt and sink”.

The fall of the Mallorca-based airline would potentially mean the loss of 6,000 jobs, the majority in the Madrid area.

Analysts at British giant Barclays Bank made the recommendation in a blunt report to the heads of International Airlines Group (IAG), which also owns Spanish airline Iberia.

The report, which also criticizes IAG’s “lack of strategic clarity”, could upset IAG executives over an acquisition that has been in the works since 2019.

It is believed that they see Air Europa as a wise purchase as part of a strategy to strengthen Iberia in the Madrid Barajas hub.

The Barclay report highlights Air Europa’s “financial problems” and warns that its high levels of debt would send the huge airline group, which also owns Aer Lingus and Vueling, further into the red.

They also believe that little is gained by absorbing the Air Europa slots in Madrid Barajas since these flight rights are not restricted.

Iberia has until March 31 to exclusively negotiate the acquisition of Air Europa.

Both parties continue negotiations to reach an agreement that must pass the filter of the competition authorities.

Iberia aims to close the deal before the deadline.

However, if there is no agreement by then, the CEO of Iberia, Javier Sánchez-Prieto, has said that they will make their future strategy public.

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