Iberia’s Spanair Bid

Following a joint decision of Iberia’s board, Spain’s most profitable airline has made a proposal to purchase main competitor Spanair, subsidiary of SAS. The Scandinavian company SAS has been losing money for years, and recently announced plans to withdraw investment in subsidies not oriented to the Scandinavian market. On the other hand, Iberia has turned profit for 11 straight years even after their privatization in 2001. This move may be a strategy to compete with low-cost airlines similar to Spanair or to ward off the increasing reach of the high-speed AVE trains.

The bid is being made in conjunction with private aviation company Gestair, conceding 60% of the future ownership to them in order to avoid anti-competition claims by the national commission, Comisión Nacional de la Competencia. British Airways may even have a final hand in the mix, as they are 10% shareholders of Iberia. Once SAS chooses a bid proponent, they expect to close the sale by end of the second quarter.

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