Air France-KLM exits Air Europa talks; Lufthansa and Turkish Airlines remain in race
August 1, 2025
Air France-KLM has withdrawn from talks to acquire a stake in Air Europa, the latest development in a long-running effort to secure the future of the privately owned Spanish carrier.
The Franco-Dutch group confirmed its exit from the bidding process on Thursday, citing an inability to reach a deal with Globalia, the parent company of Air Europa.
A spokesperson for Air France-KLM told Reuters: “Air France-KLM could not reach an agreement with Globalia, which controls Air Europa.”
Interest in Air Europa from across the continent
In March, Air France-KLM Group was reported to have made a €300 million bid to acquire a 51% controlling stake in the airline.
The breakdown in negotiations opens the door further for rival suitors, with Lufthansa and Turkish Airlines both having expressed interest in taking a stake.
Spain’s Air Europa is currently 20% owned by IAG, the parent company of British Airways and Iberia, and has long been considered a strategic prize due to its strong presence on transatlantic and Latin American routes via its Madrid hub.
The remaining 80% is owned by the Hidalgo family.
Lufthansa chief executive Carsten Spohr indicated that discussions with Globalia are still active but far from straightforward.
“I cannot yet give an answer whether it will fail or not. I can confirm that it is very difficult to get this to a success,” he said during a call with analysts.
He also confirmed Lufthansa’s continuing interest in acquiring a stake in Portugal’s TAP as part of its broader consolidation strategy in southern Europe.
Repaying its Covid debt
Air Europa has been seeking fresh capital to help repay state-backed loans received during the pandemic.
The airline needs capital to repay hundreds of million in loans, which are set to mature in 2026.
The carrier has said it wants to repay as soon as possible a loan of 475 million euros that the Spanish government granted it in November 2020.
It has hired the services of PJT Partners, an American investment bank, to expand capital and refinance the debt.
Air Europa’s long-haul appeal
Air Europa operates domestic Spanish routes as well as international services connecting Madrid with major cities across Europe and Latin America.
The move comes as consolidation pressures mount across Europe’s airline sector, driven by intensifying competition from larger network carriers in the United States and the Gulf.
Southern Europe’s high-demand leisure markets have become a particular focus for expansion, as carriers look to strengthen their presence in the region through strategic partnerships and acquisitions.
Seeking to capitalise on this, Turkish Airlines confirmed in June that it was holding “non-binding discussions” with Air Europa about a potential investment.
“Our company continuously evaluates growth opportunities to strengthen its position in the global aviation industry and enhance its competitiveness in the market,” the Turkish flag carrier said.
“Non-binding discussions are being held to assess the investment opportunity in Air Europa and to explore potential partnership synergies.”
