Turkish Airlines (Türk Hava Yollari Anonim Ortakligi (IBSE:THYAO)) is exploring making a bid for a minority stake in Air Europa (Air Europa Líneas Aéreas S.A.U.), the latest carrier to express interest in the Spanish airline, according to two sources with knowledge of the deal, with binding bids due in the coming weeks. Interested investors have been asked to submit binding bids by early July, one of the sources and two more said. The sources declined to be identified because the terms are confidential.
Turkish Airlines' consideration of a bid is significant as there are few examples of carriers outside Europe buying shares in players in the region. The interest has been reported by Spanish online newspaper El Espanol. The deadline for binding bids has not previously been reported.
Air France-KLM SA (ENXTPA:AF) and Lufthansa (Deutsche Lufthansa AG (XTRA:LHA)) are also in talks with Globalia (Globalia Corporación Empresarial, S.A.), the holding company of the family Hidalgo that founded the company, about buying a stake, Reuters reported previously. The airline makes just over a quarter of its revenues from Europe. It has a codeshare agreement with Air Europa.
Turkish Airlines did not immediately respond to requests for comment, while its shareholder Turkey's Wealth Fund declined to comment. A representative for Globalia and the Hidalgo family said they did not want to comment on an ongoing operation because of confidentiality issues. Lufthansa declined to comment.
An Air France-KLM spokesperson said the airline is interested in reinforcing its longstanding cooperation with Air Europa. Binding bids would mark the next phase of a prolonged sale process as Air Europa seeks to raise cash to repay a government loan granted during the pandemic. A previous plan had aimed for binding bids in May, two of the sources said.
The process has faced delays due in part to disagreements between members of the Hidalgo family and concerns from interested airlines on the structure of the deal, according to the two sources and a fourth one said. The interested parties are working with advisers to structure bids in the hope that buying a minority stake of about 20% may put them in a better position to take control of the airline in the future, the two sources added. Some potential suitors have expressed concern over a lack of clarity about how they may be able to do that, according to the fourth person with knowledge of the talks.
