The sale of Air Europa goes into a spin before the pulse of Hidalgo to Calviño

The balance of interests between the Government (SEPI), Iberia and Globalia to unclog the sale of Air Europa it moves away. Since it was found in December that it was impossible to close the operation devised in 2019, the parties have sought a way to agree on a new scheme that pleases all those involved. But, despite marking the end of this month of January as the last date to pronounce again, the ups and downs in the negotiations distance that possibility. Nadia Calvino’s statements, Minister of Economy and first vice-president of the Government, have not gone down well with Juan Jose Hidalgo, the largest shareholder of Globalia, which has launched an ordeal and has closed in on the Government entering as a shareholder hand in hand with Iberia.

Hidalgo has starred this week different statements in the media in which the message is the same: Air Europa will not be divided between the State and Iberia, leaving the Hidalgo family within the capital with a minority position. The anger makes perfect sense, given that the founder of the tourism holding company is affected by this formula. The entry of the State in the capital added to the arrival of Iberia as a white knight not only does it not allow him to sell and get out of the capital, but it also leaves him without command in the company that he himself created.

The alternative for Air Europa is to continue alone. The businessman from Salamanca believes that the airline’s performance is increasingly positive -at Christmas it reported an average occupancy rate of 90% on its planes- and the maturities derived from the debt contracted with SEPI and with the rescue ICO will not arrive until 2024, that is, in a scenario without a pandemic. To this is added the oxygen of the 75 million paid by Iberia at the end of 2021 for having broken the agreement and having reversed the approach set before the coronavirus crisis. The amount paid by the IAG company also put an end to any option to prosecute the process.

Despite the warning to navigators of the founder of Globalia, sources of the process point to Information that the negotiations are still going on and there could be a last minute deal. However, the red lines are maintained by Iberia, which continues to push for the operation to be consumed, as long as it does not force it to enter the capital with a position that requires it to consolidate the airline’s debt on the balance sheet. The reason: the IAG holding company has already borrowed enough during the health crisis, so they understand that carrying Air Europa’s liabilities would be excessive.

In any case, it is understood that the process being negotiated now has little or nothing to do with the purchase announced in 2019, when Iberia was willing to pay 1,000 million euros and Hidalgo, who had already received other tentative offers in the past from large business groups, was ready to say goodbye to his airline after several decades at the helm. The European Commission, always suspicious of the operation, has understood that IAG renounces taking over 100% of Air Europa, as has the British CMA in a recent ad.

The context does not invite to close an agreement in the short term either. Although in the statement sent to the National Securities Market Commission (CNMV) by the airline group IAG mentioned the possibility of exploring an alternative until the end of January this year, the indicated date could be circumvented in favor of a new agreement in the future. Right now they play against operational problems caused by omicron and the specter of a rise in fuel prices due to geopolitical problems between Russia and Ukraine.

More conditions

Despite the willingness of Air Europa to continue ahead alone, at least for a few months, the circumstances surrounding the Globalia airline, according to the voices, would inevitably end up pushing her to look for short-term solutions. Above all, as regards the short-term debt with the lessors (aircraft owners) and other providers such as Rolls-Royce. These commitments could put pressure on the company, which also has in mind that the shield against insolvency proceedings falls next summer

The future of the workers remains to be seen, who are still pending how the resolution of the process may affect them. For the time being, the company chose to send a message of calm with a letter to the workforce at the end of the year, indicating that the registered occupancy levels were good. Sources of UGT from the land and TCP sectors (crew, cabin and passengers) indicate to this medium that they are waiting to meet with the company since 2022 started in order to update the company’s situation.

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