News
The people’s paper ISSUE NO. 1844
5 - 11 November 2020
MALLORCA • WWW.EUROWEEKLYNEWS.COM
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IN the days when certain air lines were profitable or had the ability to take over those that weren’t, it seemed that an offer by IAG to purchase Spain’s third largest airline Air Europa for €1 billion wasn’t a bad deal for either side. There is a very strong con nection between IAG and Spain as several of its most se nior executives are Spanish and it owns both Iberia and Vueling, Spain’s top two air lines both of which have now received loans guaranteed by the Spanish government. Air Europa which is owned by Globalia with its headquar ters in Llucmajor has had fi nancial problems for some time, but it is an important car rier as far as Spain is con cerned with numerous flights nationally and internationally and its health is of major inter est to the Balearic Community. Understandably IAG have been reluctant to proceed with the takeover as they them selves are suffering a huge re
Credit: Air Europa
TIMELY BAILOUT AIR EUROPA: A support package has been approved.
duction in their income, but it is believed that they still con sider a takeover a good long term generator of profits if the airline can be purchased at the right price. Ironically as it now turns out, less than a week ago, IAG was suggesting that it would look to the Spanish govern ment to assist financially in or der for the takeover to be completed, but this may not now happen. The Spanish government
has stepped in and on Tuesday November 3 approved a sup port package of €475 million for Air Europa with funding be ing provided by its Strategic
Business Solvency Support Fund which is managed by the State Society for International Participation. This is the first time that it
has used this vehicle to pro vide funds to an airline and the support will come in the way of a €240 million backed equi ty loan and a €235 million reg
ular loan government spokes woman Maria Jesus Montero said in a public statement, adding that it will have six years to repay the full amount. In return, the government will take two seats on its Board and have the right to decide not only upon the choice of any new CEO, but also will have to approve the terms of any sale of the airline, even if to IAG. Once flights start to return to a semblance of normality, Mallorca will benefit with con tinued work and the regular transportation of tourists from Germany in particular, al though this may be some time in the future.