IAG And Air Europa Cover 64% Of The Madrid Hub

IAG has completed the first phase of the Air Europa purchase operation after acquiring 20% ​​of its capital . In this way, and pending completion of the rest of the purchase and receipt of the appropriate regulatory authorizations, the Spanish-British group increases its power in the Adolfo Suárez Madrid Barajas hub , one of the key objectives of the operation.

Specifically, and taking Aena data as a reference, the sum of the number of passengers transported by the two groups to or from the Madrid infrastructure would reach 64% of the total. In absolute numbers, this means having transported up to 3.24 million passengers during the seventh month of the year.

This figure far exceeds that of its direct competitors in their respective hubs , among which, for example, Air France in Paris Charles de Gaulle stands out . The French flag carrier moves monthly in percentages close to 50% of market share . Far away would still be the operations centers of other giants in the sector, such as Qatar Airways in Doha or Etihad in Abu Dhabi, which far exceed 80% of the market share.

The Madrid Barajas hub has a favorable geographical position to cover key passenger flows, for example, for connections between Europe and Latin America, so its reinforcement is key for the IAG Group and, specifically, for Iberia.

This first step for the purchase of Air Europa places it closer to the airlines of the main European hubs , which have a more consolidated position in their own airports than the one that IAG had until now in the capital’s infrastructure.

In addition to passenger traffic, this operation also gives cargo an opportunity, which despite presenting a positive trend in recent years, still has room for improvement. Even more so after the investments planned by Aena that will increase the available capacity at the Madrid airport.

All of this could lead to boosting Madrid Barajas, since in the last decade before the outbreak of Covid, the increase in capacity has been the least of its European peers. In addition, in this time, the hubs in the Middle East have “more than doubled” their capacity, according to data from a KPMG report on the potential of the integration of the Hidalgo airline in Iberia, a brand of the IAG Group.

Next steps
Be that as it may, there is still some way to go before IAG’s now financial stake in Air Europa becomes effective control over the airline’s operations. For now, and until this process is completed, both companies will continue to compete in the midst of a highly complex market due to the volatility of fuel prices and geopolitical fluctuations.

As next steps, IAG set itself a term of 18 months to acquire 100% of the capital of Air Europa, a process that is still underway and for which there would be a term of around one year. It will be then when IAG will be able to definitively rise with the victory of the Barajas hub.

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