Published on Thursday, June 11, 2020

Union attempts to block IAG's takeover of Air Europa

The Unite union has written to the EU Commissioner for Competition to oppose the acquisition of Air Europa by British Airways' parent company IAG.

The union is now in talks with the Direcorate-General Competition case team who will be investigating the £890 million takeover.

IAG struck a deal in November to merge its Spanish airline Iberia with Air Europa and create a European hub at Madrid. The agreement has still not been finalised.

Unite has strongly criticised IAG's decision to spend hundreds of millions of pounds on a new acquisition, while carrying out what's been called a 'fire and re-hire' strategy on its BA workforce.

However, IAG says the Iberia/Air Europa deal is a separate issue to BA's staffing.

Unite has told EU Competition Commissioner Margrethe Vestager it has a number of serious competition concerns over the Air Europa deal.

These include IAG's increasing domination of the market for flights from Europe to South America, IAG's dominant position at Madrid-Barajas airport and the group's return to a monopolistic hold over the Spanish domestic market.

These issues all make it likely that the acquisition would drive up ticket prices and reduce the number of fights on some routes.

Unite executive officer Sharon Graham 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.

"There are a number of reasons why this merger of Iberia with Air Europa would appear to be anti-competitive.

"The case team at DG Competition have been very open to us sharing our concerns with them.

"We are now gathering further detailed evidence from a number of expert sources and discussing the takeover with other parties that could be negatively impacted.

"We are confident that we have a strong case and we look forward to officially presenting all our evidence when Phase 1 of the investigation begins."

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