Volotea, Abra End Remedy-Taker JV Plan After IAG-Air Europa Deal Fails

Spanish LCC Volotea and Abra Group, the parent company of Avianca and GOL, will not proceed with a joint venture (JV) partnership they had planned with a view to taking on divested Madrid slots after IAG abandoned its bid to take over Air Europa.

“The joint venture between the Abra Group and Volotea depended on whether the companies could act as remedy takers in the IAG and Air Europa merger,” a spokesperson said.

However, the two have not ruled out future cooperation. “Both Abra and Volotea will continue exploring future business opportunities,” the Volotea spokesperson said.

IAG on Aug. 1 said it was abandoning plans to take over Air Europa, through which it had hoped to accelerate development at its Madrid hub. The European Commission (EC) had launched an in-depth investigation into the proposed transaction in January, over preliminary concerns that the acquisition could negatively impact competition on routes to, from, and within Spain.

After the deal was abandoned, the EC said it had been concerned the transaction would have led to adverse effects for passengers such as increased prices or decreased quality of service.

IAG CEO Luis Gallego said the group had put forward “a very generous and ambitious remedy package,” which proposed transferring 52% of Air Europa’s frequencies in 2023 to two remedy takers but claimed that the EC’s conditions on the deal were too onerous.

IAG plans to retain its 20% stake in Air Europa in the short term and continue to grow its presence in Madrid through organic means.

“Volotea regrets that the operation did not move forward, as it represented a unique opportunity for the sector and for our country,” the Volotea spokesperson said Aug. 12. “From the very beginning, Volotea offered to act as a remedy taker, and we did everything within our capacity to achieve a positive outcome, including the joint venture agreement with Abra, announced in June, to connect short- and long-haul flights in Madrid.”

The carrier sees the failure of the deal as affecting the pace of its own development. “For Volotea, the operation was undoubtedly a good opportunity to grow in Spain, and we will continue with our market development strategy, although at a different pace,” the LCC said. “We will keep increasing seats and destinations each year and providing the best service to our passengers, who are our priority.”

Volotea had said in June it was teaming up with Abra in a JV agreement that could see the partners take over slots to allow competition authorities to approve the proposed IAG-Air Europa deal.

At the time, the partners said the agreement would allow them to explore commercial and operational opportunities together via their complementary networks and expand connectivity between Europe and the Americas via a fully integrated network solution.