This Tuesday, a shocking piece of news was confirmed for European aviation : Turkish Airlines acquired a 26% stake in Air Europa in a transaction estimated at €275 million (approximately $320 million). With this purchase, the Turkish airline becomes a strategic partner of the Spanish company , which is still controlled by the Hidalgo family. According to specialized media in Spain, a joint announcement by both companies will be made shortly.
The transaction still needs to go through competition authorities, a process that could take around three months. For Turkish Airlines , the deal represents a key step: access to Air Europa’s extensive flight network between Europe and Latin America from its hub in Madrid-Barajas.
How was the agreement between Turkish Airlines and Air Europe?
The Turkish landing comes after other industry powerhouses, such as Air France-KLM and Lufthansa , considered the operation but ultimately backed out.
The details of the agreement
- Who buys: Turkish Airlines, Turkey’s flag carrier.
- What it acquires: 26% of Air Europa’s capital.
- Amount: 275 million euros (approximately US$320 million).
- Current shareholding: The Hidalgo family retains control; IAG retains 20%; and Turkish Airlines enters with 26% .
- Next step: regulatory authorization.
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Financial relief for Air Europa
The capital inflow provides a boost to the company. According to statements made by its president, Juan José Hidalgo , to EFE, the funds will be used to repay the €475 million loan granted by SEPI during the pandemic, divided into a €240 million participating loan and a €235 million ordinary loan.
That bailout had already begun to be paid off in May, with the cancellation of a €150 million loan from the ICO, and will now be complemented by the search for a new line of credit with Spanish banks, in the range of € 100 to €130 million .
With this new partner, Air Europa’s ownership is more evenly distributed: IAG controls 20% and Turkish Airlines joins with 26%. Hidalgo made it clear that he has no plans to sell any more shares and emphasized that these are “the best I could have,” as they are two of the largest airline groups in the world. He also expressed his “relief,” assuring them that “the airline will continue forward and that Spain will have its own national carrier.”
A six-year negotiation
The agreement closes a long chapter of failed negotiations. In November 2019, IAG had signed a preliminary agreement to acquire the entire Air Europa holding company for €1 billion . The outbreak of COVID-19, with estimated losses of €1.4 billion for the company, derailed the transaction.
A second agreement for 500 million euros was subsequently attempted, but the conditions imposed by Brussels regulators made the merger unviable. Hidalgo, recalling that period, insisted that state assistance “was never a bailout; we were granted a loan guaranteed by Globalia” to help us navigate a “true ordeal” during the global crisis.
If the Competition Authority’s procedures are completed between September and November, Turkish Airlines’ 275 million euros will be used to pay off its debt to SEPI.
The transaction also introduces a new development in the international landscape: the entry of Turkish Airlines, a member of Star Alliance, into the capital of Air Europa, a member of SkyTeam, creates an unprecedented scenario at Madrid-Barajas Airport, which could redefine competition on the Europe-Latin America corridor.
