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British Airways owner IAG backs out of buying Spain’s Air Europa

British Airways owner IAG said Wednesday it no longer intended to complete its purchase of Air Europa, although it would still like close cooperation with the Spanish airline.

air europa plane
IAG already owns two leading Spanish airlines, Iberia and Vueling. Photo: Manuela Picq / AFP

IAG initially agreed to pay €1.0 billion  just months before the Covid-19 pandemic broke out.

At the beginning of 2020 IAG said it had reached an agreement to cut that price in half and delay payment for six years, but the continued difficulties that airlines are facing have scuttled the purchase.

“Unfortunately, because of the devastating effect of the pandemic, the conditions are not favorable” for the deal to go through as is, said IAG chief executive Luis Gallego.

But as “Air Europa operations are very important from a strategic point of view” for IAG it would look at other ways they could cooperate, he said.

Air Europa’s current owner, Globalia, declined to comment when contacted by AFP.

IAG already owns two leading Spanish airlines, Iberia and Vueling.

It had hoped the acquisition of Air Europa would allow it to expand routes to Latin America and the Caribbean.

The deal faced potential objections from European regulators as it would eliminate competition on certain routes.

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BUSINESS

Primark grows its empire in Spain with 8 new stores and 1,000 jobs

Irish fast fashion retailer Primark has announced it will invest €100 million into its stores in Spain, opening 8 shops in new locations and creating 1,000 jobs in the process.

Primark grows its empire in Spain with 8 new stores and 1,000 jobs

The popular low-cost clothes chain has said they will open eight new stores over the next two years in Spain, as well as refurbishing its existing ones. 

Up to €80 million will be spent on opening the new shops, while the remaining €20 million will go towards upgrades and improvements in other stores.

Spain is already Primark’s second largest market after the UK.

The ambitious plans will also create 1,000 new jobs, bolstering the local economy and bringing Primark’s total workforce within Spain to 10,000.

The company owned by Associated British Foods (ABF.L) has said that it will open its first store on the Canary island of Lanzarote as well as its first in the Spanish enclave of Melilla and one in Toledo.

There are also plans to open new stores in Lorca and Jaén over the next two years, as well as three more in the region of Madrid.

Madrid is already home to eight Primark stores including the retailer’s flagship 12,400-square-metre store located on the emblematic Gran Vía, next to Primark’s Spanish headquarters.

The Primark store in Diagonal Mar in Barcelona is also due to be refurbished and extended.

Carlos Inacio, the director general of Primark Spain, said of the move: “We are proud to announce a significant investment in our store portfolio and long-term growth of Primark Spain. This exciting expansion plan will create employment, positively impact the local communities we are opening in and bring Primark stores closer to our customers across Spain”.

Primark has said that it will also continue with its commitment to half the carbon footprint across its stores by 2030 by installing LED lighting in its Spanish shops, as well as other improvements.

The low-cost fashion chain has also been trialling new concepts across Spain by opening up food and drink outlets within its stores.

This year, Primark opened a frozen yogurt stand Llaollao in its Marbella store, as well as a Granier café in its Seville store. Primark Granada and Palma have Llaollao stands during the summer months.

The retailer has opened three new stores in Spain in the last 12 months, including in San Sebastián, San Fernando and Girona.

Primark opened its first store in Madrid in 2006 and currently has 56 stores in 42 cities across the country. These are not only located in big cities like Barcelona and Madrid, but also smaller ones such as Logroño, Vigo, Santa Cruz de Tenerife, Orihuela and Tarragona.

The retailer recently announced an investment of £140 million for its UK stores as well as an investment of €100 million in the French market.

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