Improved Air Europa performance will influence Iberia's intentions regarding acquisition. | Archive

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Air Europa, part of the Globalia group based in Llucmajor, has been granted a year's extension to the so-called accounting moratorium, the mechanism by which bankruptcies caused by the pandemic have been avoided. The Spanish government has granted this extension to allow Air Europa time to improve its solvency and reach levels required by the government to overcome financial and liquidity problems.

The moratorium is due to expire on December 31. There may yet be a general extension. If not, there is the risk of an avalanche of filings for bankruptcy. The travel and tourism sectors were obviously badly affected by the pandemic, and businesses still face problems despite the strong recovery during 2022; Air Europa itself has posted good financial figures for the year.

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According to El Confidencial, the president of Globalia, Juan José Hidalgo, personally approached Prime Minister Sánchez and King Felipe in seeking an extension to the moratorium. The CEO of Air Europa, Jesús Nuño de la Rosa, has held talks with the ministry for economic affairs regarding an extension. These meetings have also been attended by Ramiro Campos, who is the financial and legal advisor for SEPI at Air Europa. SEPI is the state holding company, which has been involved with Air Europa's management because of loans to the airline from the Spanish government. There are debts of 616 million euros, of which 141 relate to ICO (credit institute) loans and 475 to SEPI.

The airline says that the extension is good news as it guarantees continuity "and we can carry out our strategic plans for route expansion and fleet renewal". "We have significantly improved our revenues this year and the forecast for the short and medium term is very positive on all routes, and most specifically on long-distance Caribbean and Latin America routes."

Air Europa remains the target for potential acquisition by IAG (Iberia). The latest on this is that Iberia has until the end of March to increase a 20% shareholding in Air Europa.