IAG says EU antitrust rules hinder easyJet deal options in Europe

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IAG on EU antitrust and easyJet

Highlights

IAG CEO Luis Gallego says EU antitrust regime makes a potential easyJet deal 'very, very difficult,' urging Brussels to rethink airline merger assessments.
Castlelake has until June 26 to submit a bid for easyJet, but any deal involving IAG or Air France-KLM likely faces significant antitrust challenges due to route overlaps.
IAG abandoned its 2024 bid for the remaining 80 percent of Air Europa after European Commission competition concerns, and also walked away from a TAP stake earlier this year.

Merger rules shape IAG's deal stance

As reported by Financial Times, IAG chief executive Luis Gallego says a potential bid for easyJet is possible to examine but is "very, very difficult" under the current competition regime, as he presses Brussels to rethink how it assesses airline mergers.

Gallego says IAG remains open to consolidation opportunities beyond easyJet and regularly speaks with other airlines about possible combinations. He argues that aviation in Europe needs greater scale to become more efficient and to compete globally, adding that looser regulation could open the way for bigger transactions across the region.

Any offer by Castlelake for easyJet is likely to require partners, potentially including a European airline, to satisfy ownership rules. But any deal involving IAG or Air France-KLM would carry substantial route overlap and likely face antitrust scrutiny, while Castlelake has until June 26 to submit a formal bid.

Gallego declines to comment on Castlelake directly, although people familiar with the discussions say the airline is not in talks with the U.S. private credit group. He instead says regulators need to place more weight on transfer traffic and competition between hub airports, rather than focusing mainly on point-to-point markets.

Past setbacks and regional consolidation pressure

IAG abandoned its attempt in 2024 to buy the 80 per cent of Air Europa that it does not already own after the European Commission raised competition concerns over proposed remedies. Gallego says the group believed the transaction would benefit customers and strengthen Madrid as a hub, but adds that IAG can continue without full control of the Spanish airline and still retains a financial stake.

Formed in 2011 through the merger of British Airways and Iberia, IAG has long presented itself as a consolidator of European carriers and also owns Aer Lingus and Vueling. Earlier this year, it also dropped the chance to buy a stake in Portugal's TAP after the government did not provide assurances that IAG could eventually take control.

Gallego says smaller airlines across Europe need to belong to a bigger group to survive, but he rules out transformative deals outside the region. He says the existing joint venture with American Airlines already delivers the available advantages and antitrust immunity, leaving no need for deeper integration, while adding that the U.S. carrier is investing in its product and can recover.

Our earlier article looked at the June 24 House Judiciary antitrust subcommittee hearing on competition and regulation in the U.S. airline industry, as lawmakers revisit merger oversight and consumer-protection enforcement. It also noted how Spirit Airlines’ collapse has intensified debate over whether tougher antitrust policy helped accelerate industry disruption, alongside signals of shifting federal enforcement priorities affecting major carriers.

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