May 27, 2022

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Air Europa launches ERTE, merger with Iberia at risk

Air Europa launches ERTE, merger with Iberia at risk

The Spanish tourism group Globalia announced that it is seeking to launch a Temporary Employment Regulation (ERTE) file For fear of lower demand in the fall and winter (northern). This measure will affect about 9,000 employees, 60% of the total.

According to the sources secrecyGlobalia intends to initiate a negotiation process with unions to implement economic ERTE (commonly known as ETOP) in all group subsidiaries due to low post-holiday reserves and lack of guarantees for the extension of approved ERTEs. The Spanish government during the pandemic.

In the case of Air Europa, the crisis affected its long-haul operations due to health restrictions in its most important markets in Latin America: Argentina, Brazil and Peru, and in North America to the United States. The airline has been embroiled in the controversy over government aid from the Sociedad Estatal de Participaciones Industriales (SEPI), which granted it 475 million euros in loans.

Air Europa employees, including cabin crew, pilots and ground crew, have for months rejected a new 6% pay cut. The union questioned the amendment, citing the high salary of the company’s new director as an example.

Iberia, a subsidiary of International Airlines Group (IAG) Negotiations are also underway with unions to include more than 5,000 employees.

The merger between Air Europa and Iberia is at risk

The economic situation of long-term Spanish airlines operators may cast doubt on the acquisition of IAG to merge Iberia and Air Europa and strengthen its operations at Adolfo Suarez Madrid-Barajas Airport.

The European Union, through the Committee for the Defense of Competition, has also indicated that there are other difficulties to be resolved regarding the dominant position that the joint operator will have in the Spanish market. One decision could be to give slots (slots for landing and take-off) to low-cost competitors like Ryanair, which could hurt air operations and eliminate competitive advantage, so the idea of ​​a merger would lose its appeal.

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