Spanish low-cost carrier Volotea and Avianca parent company Abra Group have signed a joint-venture agreement to act as a “remedy taker” should IAG complete its acquisition of Air Europa.

The European Commission has been requesting remedies from Iberia parent IAG as it continues to consider approval of its proposed acquisition of Madrid-based Air Europa. The regulator previously expressed its concern that the tie-up might reduce competition on services out of Spain, potentially limiting choice and increasing costs for consumers.

Madrid signing

Source: Volotea

Abra Group chief Adrian Neuhauser and Volotea boss Carlos Munoz sign the agreement on 25 June

Under the joint venture announced on 25 June, Volotea and Abra would offer an outlet for those remedies through the former basing up to 20 aircraft at Madrid to take advantage of slots handed over by IAG and Air Europa to get their deal over the line.

Those Volotea aircraft would connect travellers from European and Middle East destinations on to Avianca flights to Latin America at Madrid, then on to Abra Group’s network in the Americas and the Caribbean.

Latin America is Air Europa’s biggest long-haul market.

“The joint venture we are presenting today is a distinctive solution that will benefit millions of travellers with an expanded network, a unified product, quality service, and competitive prices,” says Abra Group chief executive – and former Avianca boss – Adrian Neuhauser.

The joint-venture partners stress that given their respective networks, their “alliance” offers the “optimal and integral solution” to the remedies involved in green-lighting the IAG-Air Europa tie-up.

They say they have been discussing their plans with the Commission.

Other carriers – such as World2Fly – might also benefit from the remedies, however.

The implementation of the plans would mark a shift in strategy for Volotea, which largely bases its business model on connecting smaller airports on routes where it is the only operator.

Alongside Colombia’s Avianca, Abra is also the holding company for Brazilian carrier Gol, which is currently going through the Chapter 11 process. It also recently announced an investment in Spanish charter carrier Wamos Air.

A Commission decision on the IAG-Air Europa deal is expecting in the coming weeks.