UK regulator to probe IAG Air Europa deal

The UK’s competition regulator said it was conducting a probe into IAG's planned €500m purchase of Spain's Air Europa to see if it would harm competition in Britain.

IAG, which owns British Airways, Iberia and Aer Lingus, said it would cooperate with the Competition and Markets Authority (CMA) investigation.

It has already attracted attention from the European Commission, which started an investigation in June, over concerns that the proposed deal would cut competition on Spanish domestic routes and on international routes to and from Spain.

The deal, which involves Iberia buying Air Europa on behalf of IAG, is opposed by Britain’s Unite union which fears job losses.

IAG had planned to buy Air Europa for €1bn in 2019, but the price was halved as the airline industry was battered by the Covid-19 pandemic.

"We will collaborate with the CMA. The London-Madrid route is highly competitive and is already part of the European Commission (investigation) process," IAG said in a statement on Monday.

The CMA has set a January 19 deadline for its initial investigation decision.