Air Europa: the two sides of the coin for surviving without Iberia are its 787s

If Brussels prevents Air Europa from joining Iberia, its 25 Boeing 787 Dreamliners will be one of the keys to survival, even though this model represents two faces for them.

On the plus side, getting 25 long-haul aircraft for any airline in a short time was until recently an attractive option, although this interest may now have slowed.

Weakening demand in regions such as Asia has led to European stock market giants such as Lufthansa plummeting on the stock exchange after announcing a reduction in its profit forecast.

Furthermore, and on the less favorable side, the long-distance model from the American manufacturer is becoming the most problematic in its segment, due to the multiple problems with its engines, as has been reported. REPORTUR.us.

In fact, Air Europa itself is seeing its entire fleet of the aforementioned model severely affected by the overhauls and repairs of these engines, which discourages the interest of potential candidates for what could be its main asset.

Thus, Air Europa’s future is conditioned by its potential to generate profits that can cover its debts, and by the list of realistic buyers that could help it sustain its financial balance, as revealed by Preferential (Iberia-Air Europa: the concessions are insufficient for Brussels).

Air Europa’s EBITDA in an average year, between 100 and 200 million euros, is compromised by financial interests of around 7 percent of the debt of almost 1,000 million euros, which amounts to around 70 million euros per year.

In addition, Globalia’s airline must gradually face the repayment of debts both with banks and, above all, with the Spanish State after it was rescued with a public loan once the entities turned off the credit tap.

This scenario makes it difficult for the only two possible candidates, along with IAG, to buy the airline, such as Air France-KLM and Lufthansa, to consider that an acquisition would be worthwhile for them and to convince their shareholders that it could make as much strategic sense as the more obvious one for Iberia.

The European Commission may therefore decide to veto IAG from integrating Air Europa, but in doing so Brussels would be exposed to blame if the Globalia airline faced an uncertain future due to the lack of support that Iberia would provide (Iberia-Air Europa: they regret that Brussels does not specify what else it wants).