IAG mum on TAP privatisation being its "Plan B"

IAG International Airlines Group has declined to comment on media speculation that it is closely watching the pending reprivatisation process of TAP Air Portugal as a possible "Plan B' should its intended 100% acquisition of Air Europa (UX, Palma de Mallorca) not meet with European Commission approval.

"We never comment on rumour or speculation," an IAG spokesperson informed ch-aviation.

Spanish business and finance newspaper, Cinco Días, reports the imminent opening of TAP's privatisation process has not altered IAG's objective of boosting its Spanish subsidiary Iberia by acquiring all of Air Europa, but, at the same time, was keeping a close watch on developments in Lisbon.

As reported, IAG last year converted its EUR100 million euro (USD100 million) loan to Air Europa parent Globalia into a 20% stake in the airline. The deal was conditional on Iberia not intervening in the management of Air Europa and that both airlines continue to operate independently. However, IAG and Iberia reportedly are negotiating with Brussels and Spain's state-owned holding company (Sociedad Estatal de Participaciones Industriales - SEPI) to take on 100% of Air Europa.

Last month, Ryanair chief executive Michael O'Leary climbed into the speculation ring when he told a news conference that IAG was - in his opinion - the most likely to purchase the Portuguese flag carrier. "TAP will end up in the hands of British Airways/IAG" rather than with Lufthansa or Air France-KLM, he predicted.

Still, Minister of Economy António José da Costa Silva told Parliament on February 15 that the Spanish were not a good fit due to the proximity of the hubs in Lisbon and Madrid.

Global investment advisory firm Evercore ISI has been appointed the transaction advisor for the semi-reprivatisation of TAP, which is currently undergoing restructuring as a condition for a EUR3.2 billion (USD3.4 billion) Brussels-approved state bailout.

The Portuguese government looks to re-privatise at least half of TAP's share capital and reportedly has begun discreet discussions with Air France-KLM, Lufthansa Group, and IAG, all three of which have declined to comment.

In 2021, the EC opened an in-depth investigation to assess the proposed acquisition of Air Europa by IAG under EU merger regulations. The commission at the time said it was concerned that the proposed transaction could reduce competition on Spanish domestic routes and on international routes to and from Spain, particularly to South America.