International Airlines Group (IAG) the parent company of British Airways, Aer Lingus and Iberia, among other carriers seems to be looking to reduce the price it would pay to acquire Spanish carrier Air Europa, below the value of 1 billion euros ($1.18 billion) at which both carriers had agreed to make the transaction last November when the deal was originally announced.
As reported by Spanish tabloid El Confidential, IAG would be looking to pay between 300 million euros and 400 million euros for Air Europa. As part of the new agreement IAG wants to lock in, the London-based holding company wants to split payment between cash and IAG shares.
The company is seeking a price reduction due to the COVID-19 pandemic slamming the airline industry worldwide, as travel remains limited across much of the world. This reduces the value of Air Europa versus what the company was worth one year ago. Though the deal was initially postponed because of the pandemic, IAG has reiterated that it is still interested in purchasing Air Europa as it sees the long-term value in taking ownership of the carrier’s assets and position in the Spanish market.