Anglo-Spanish airline multinational IAG is feeling the heat as the Brexit deadline fast approaches.
If a withdrawal agreement isn’t signed between the UK and the EU, two of IAG’s Spanish airlines – Iberia and Vueling – face the prospect of losing their licenses to operate in Europe.
That’s unless the London-headquartered conglomerate can prove it is 50 percent owned and controlled by an entity in the European Union.
This explains IAG’s latest claim that more than 50 percent of Iberia’s political rights are in the hands of El Corte Inglés, Spain’s emblematic department store group and the biggest of its kind in Europe.
According to IAG – which also owns British Airways, Aer Lingus and the Avios Group among others – Iberia is Spanish as its headquarters are in Madrid.
The airline conglomerate has presented its complex corporate structure, stemming back to Iberia’s takeover by BA in 2011, in order to explain how in their view Spain’s flag carrier is still run from Spain by a company called IB Opco Holding SL.
This association was allegedly responsible for splitting Iberia’s financial rights – 100 percent owned by IAG – from its political rights, which are 50.01 percent in the hands of Garanair, a shell airline business which is 100 percent owned by El Corte Inglés.
According to Spain’s Commercial Register, Garanair has only one employee and a value of just 7,000 shares, each worth €1.
As fragile and dubious as this strategy may seem, so far it seems to be IAG’s only contingency plan in the event of a no deal Brexit, leading Spanish daily El País reported.
“We’re convinced that we will meet the regulations relating to ownernship and control,” a spokesperson for the conglomerate said.
“IAG is a Spanish company (its registered office is in Madrid whereas its head office is in London) and our group’s airlines have had the necessary operational certificates since our establishment.”
Vueling, which is owned by Iberia, would also be protected by this strategy if the European Commission accepts its bizarre appeal and Spain's Aviation Safety and Security Agency maintains the licence for both airlines.