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Speculation Mounts That British Airways Owner IAG is Looking to Snap Up EasyJet or TAP Portugal

Speculation Mounts That British Airways Owner IAG is Looking to Snap Up EasyJet or TAP Portugal

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International Airlines Group (IAG), the Madrid-based owner of British Airways and Spain’s Iberia, could be in the market to snap up the struggling Portuguese flag carrier TAP Air Portugal or even the loss-making European budget carrier easyJet as a new wave of airline consolidation looks to sweep the continent.

On Monday, the Times of London reported that there was growing speculation that IAG is looking to take advantage of its far faster-than-expected post-pandemic recovery to acquire embattled rivals.

Last week, the aviation group reported a €1.2 billion profit for the third quarter after travel demand bounced back as pandemic restrictions were lifted earlier this year. IAG’s airlines, which also include Ireland’s Aer Lingus and Spanish budget brand Vueling, have bee able to charge a premium amidst capacity constraints.

Despite fears of a global recession and surging inflation, IAG’s chief executive Luis Gallego says there are currently no signs of a slowdown in bookings, while capacity is still to reach 2019 levels.

Seemingly confirming reports that the company was on the hunt for a new acquisition, Gallego said: “We are a platform for consolidation. We will only do what makes sense but we see there are opportunities to be stronger. We are a group that wants to consolidate the industry.”

IAG planned to acquire Spanish carrier Air Europa in a €1 billion deal struck just before the pandemic. The aviation group has since abandoned that plan but has taken a 20 per cent stake in the airline as part of a long-held ambition to turn Madrid into a global aviation hub.

Europe’s two other airline groups – the Lufthansa Group and Air France-KLM have also been sniffing around TAP Air Portugal, with the Portuguese government keen to offload its stake in the loss-making carrier.

The Lisbon-based airline could be a good fit for IAG as it wants to dominate the market between Europe and South America.

Meanwhile, shares in EasyJet surged 22 per cent on reports that IAG could be interested in adding the airline to its portfolio of brands. EasyJet has seen its share price tumble over the last year as it falls behind its rivals and struggles to return to profitability.

Whether any potential takeover deal would make it past European competition regulators is another matter altogether, although some aviation analysts believe consolidation will be the only way for smaller airline brands to survive.

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  • I hope British Airways gets TAP. They’ve wanted them for a long time but the Portuguese government doesn’t want them to be in the same alliance as Iberia. If BA gets TAP then I have an extra use for all of my avios.

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