IAG begins to see the light of recovery at the end of the Covid tunnel but perceives in a “more pessimistic” way the future of the Air Europa purchase operation. This has been confirmed by Luis Gallego, president and CEO of the IAG Group , and Javier Sánchez-Prieto, president of Iberia , during a meeting with journalists after the presentation of the company’s results. All this, while acknowledging the financial difficulties that Air Europa is going through and that, as the Economist already pointed out , ” there are elements that show that the company could need recapitalization in the coming months .”
“We have presented the remedies (new proposals based on the first report of the Commission) and now we have until January 4 to know the decision of the European Commission,” said Gallego when asked how is the purchase operation of the Hidalgo airline.
“In parallel we are talking with the Government and with Globalia, ” he said, recalling that it is an operation that has to fit into three bands: in the ‘remedies’ of Brussels, the conditions of the Government for the loans granted through of the State Society of Industrial Participations (Sepi) and those imposed by Globalia itself . “If when we have those three variables, it comes out positive, it will be done,” he admitted.
Gallego and Sánchez-Prieto have recognized that Air Europa’s “debt situation” is very important for the company, which maintains “payment commitments that were signed when it was thought that things would improve sooner.” “When it was signed, it was thought that it could make sense, now we have to see it,” they said, so the conditions for repayment of the debt are one of the key points of the negotiations.
“We continue to defend that the deal is very positive for developing the Madrid hub . If you ask me today, I am more pessimistic about the future of the operation,” he said, confirming that they have presented better proposals than those that were put on the table in Brussels. In the first moment. “We can’t do more.”
In the event that the operation finally does not go ahead, the contract that was signed exactly two years ago and which was initially for 1,000 million that was later lowered to 500, contemplated a clause through which Iberia would have to pay Air Europa a penalty of 40 million euros . When asked if they were willing to face this disbursement, Gallego has been blunt: “yes.”
Opening of the American market
Beyond this operation, IAG has high hopes for the opening of the American market that will take place on November 8. “The flights on the 8th are almost 100%,” said Gallego, a trend that will continue for almost the entire month of November.
IAG plans to reach 60% of 2019 capacity levels in the fourth quarter (with 70% in December). The company’s goal is to reestablish around 90% of its British Airways operations by the summer of 2022, with 100% of 2019 capacity on the North Atlantic routes.
Ron Wills is Based in Cape Town and loves playing football from the young age, He has covered All the news sections in WideWorldMag and have been the best editor, He wrote his first NHL story in the 2013 and covered his first playoff series, As a Journalist in WideWorldMag Ron has over 8 years of Experience.