Air France-KLM Offers €300 Million to Acquire Control of Air Europa: A Strategic Move in the European Airline Market
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The battle for control of the financially troubled Spanish airline, Air Europa, has taken a new turn, with the Air France-KLM Group stepping up with a €300 million offer to acquire a controlling stake. This move directly challenges Germany's Lufthansa Group, which had previously been the frontrunner to secure the deal. Here’s what we know about this high-stakes acquisition and what it means for the European airline industry.
Air France-KLM’s €300 Million Offer: The Details
In a bold move, Air France-KLM has reportedly offered €300 million in cash to acquire a 51% stake in Air Europa from the Hidalgo family, who control the airline through their Globalia travel group. The deal would provide the Franco-Dutch airline giant with a significant stake in the indebted carrier and potentially shape the future of the Spanish airline market.
In addition to the cash injection, Air France-KLM has also expressed its willingness to assume Air Europa’s outstanding debts, which largely stem from emergency loans provided by the Spanish government during the COVID-19 pandemic. These loans were crucial for Air Europa’s survival as the aviation industry grappled with the financial fallout of the global health crisis.
A Competition with Lufthansa: Who Will Win the Deal?
The offer from Air France-KLM puts it in direct competition with Lufthansa Group, which had previously been seen as the likely candidate to acquire Air Europa. Lufthansa had emerged as the leading bidder after the collapse of a proposed deal with International Airlines Group (IAG), which owns British Airways and Iberia. IAG had been in negotiations to acquire Air Europa, but the deal fell apart in August 2024 following a ruling by EU competition authorities, who deemed the merger anti-competitive.
Lufthansa had proposed a €240 million offer, which included a capital increase of 25% in Air Europa, enabling it to pay off state-backed debts. Lufthansa’s aggressive European expansion strategy, including majority stakes in multiple airlines such as SWISS, Austrian Airlines, Brussels Airlines, and ITA Airways, has made it a dominant player in the European aviation market. Despite this, Lufthansa's ties with Air Europa, including a Boeing 787-9 lease between Air Europa and Lufthansa’s Austrian Airlines, may not be enough to seal the deal.
The Hidalgo Family’s Dilemma: Which Bidder is Best for Air Europa?
The Hidalgo family now faces a critical decision. Reports indicate that the family is divided over whether to accept Air France-KLM’s offer or Lufthansa’s bid. Key factors influencing the decision will likely include each airline group's plans for improving Air Europa’s operations and securing the airline’s long-term financial future.
Air Europa, which has faced operational challenges and has struggled to compete with Iberia, Spain’s national carrier, will need significant improvements to regain competitiveness. The Hidalgo family will have to carefully evaluate which bidder offers the most strategic value, especially as both Air France-KLM and Lufthansa bring their own strengths to the table.
Air France-KLM’s Strategic Vision for Air Europa
Speaking in March 2025 about the group's financial performance, Air France-KLM CEO Benjamin Smith confirmed the group's interest in acquiring a stake in Air Europa. This is not the first time the airline group has made moves to strengthen its European network. The Air France-KLM Group recently acquired a 19.9% stake in Scandinavian airline SAS, indicating a strategy focused on expanding its influence in the European market.
For Air France-KLM, taking control of Air Europa would offer a chance to strengthen its position in the highly competitive Spanish market and improve its overall route network, especially in the key Europe-Latin America sector.
Air Europa’s Fleet and Performance
As of 2024, Air Europa operates a fleet of 26 Boeing 737-800s, 7 Boeing 787-8 Dreamliners, and 15 Boeing 787-9s, with an average aircraft age of 9.1 years. Despite challenges, the airline has maintained a solid presence, carrying 12 million passengers across Europe, Latin America, and the Caribbean in 2024.
This fleet, coupled with a significant route network, makes Air Europa an attractive acquisition target for any airline group looking to strengthen its position in the European and transatlantic markets.
What’s Next for Air Europa?
The future of Air Europa is now in the hands of the Hidalgo family, who must weigh the options presented by both Air France-KLM and Lufthansa. With both airlines offering strategic advantages, it’s a crucial decision that could reshape the future of the Spanish airline industry and impact broader European aviation dynamics.
As Air France-KLM moves to expand its footprint across Europe, it faces tough competition from Lufthansa, which has already established a dominant presence. Regardless of the outcome, this battle for control of Air Europa highlights the ongoing consolidation in the airline industry and the intense competition for market share in one of the world’s most lucrative aviation markets.