Iberia maintains a clear aim to advance its expansion through Air Europe. The IAG group continues pursuing an agreement with Globalia to acquire 100% of the Spanish airline, having already taken a 20% stake and aiming to finalize the deal before the end of the first quarter of the coming year, measured from the moment the exclusivity period with the Hidalgo family ends, as stated by the chairman, Luis Gallego, during a media call after presenting the group’s results for the first nine months of 2022.
“The parties must settle on a price that benefits both sides. There is a year of exclusivity that will expire in the first quarter of next year, and the goal is to reach an agreement as soon as possible,” Gallego said. The leader, a former Iberia president, indicated that if everything proceeds as expected, the process could advance swiftly after the required competition clearances are obtained, with the acquisition becoming effective within a year if approvals are secured.
Regarding the price, a year ago the figure was 500 million euros, roughly half of what was initially planned. At first Gallego downplayed the matter, noting, “If you ask Globalia they might say older, if you ask me it should be newer, the aim is to reach a balance.”
In the nine months ending 2022, the group reported a profit of €199 million, a sharp contrast to a €2,622 million loss a year earlier, signaling a solid footing supported by strong demand in the premium holiday segment and a rebound in corporate travel. All airlines within the group contributed: Vueling earned €259 million (nearly €30 million more than pre-pandemic levels), Iberia posted €246 million (about €27 million less), and Air Lingus reported €139 million (roughly €30 million below the prior year).
Bookings holding firm amid no crisis signals
The group has yet to detect any signs of economic weakness in reserves for the last quarter and early 2023. “There are no indications of weakness in reserves,” Gallego confirmed. He estimated that airline capacity would be around 87% of 2019 levels for the fourth quarter, placing overall 2022 capacity at roughly 78% of 2019 levels. For January through March next year, capacity is expected to approach 2019 levels, with a gradual rise thereafter.
Iberia weighs a negotiated and agreed ERE after deals are signed
In terms of pricing, Gallego declined to provide specifics, noting that rates had risen due to energy costs and inflation, yet would adjust as capacity grows and demand shifts. The group’s fuel hedging coverage stood at 68% and is projected to fall to 63%, with projections for the first quarter of 2023 suggesting a decrease to 53% in the second quarter, and so on. The executive highlighted that the company has revised its Covid-era coverage policy from a three-year window to a shorter period, tailored to the airline and market conditions.
Vueling faces a cabin crew strike
The group confronts a quarterly cabin crew strike led by the Stavla union on certain dates from November 1, 2022 to January 31, 2023, including additional days through December and into early January. Marco Sansavini, CEO of Vueling, described the proposed 13.4% wage increase as unsustainable, asserting that Vueling cannot negotiate under the threat of strikes while still maintaining a high operational rate on dependent days.
In response, the IAG leadership stressed that agreements with various groups are essential for decision stability in the coming years, while also emphasizing the need to reduce debt and finance aircraft purchases. The aim remains to reach civil agreements that sustain the group’s long-term viability and growth.