Pandemic has affected the airline mergers plans

The coronavirus pandemic has affected business plans worldwide and it includes mergers and acquisition plans. The companies and regulators have to rethink their plans and redevelop their strategies as they adapt to a changing landscape amid coronavirus crisis. But, two airline acquisitions can reach to a conclusion even before the end of this crisis.

The parent company of airlines Iberia and Vueling, IAG, released a plan in November 2019. The company’s intention in this deal was to strengthen Iberia’s presence in Madrid. There have been reports in the Spanish Media that IAG wants to renegotiate the prices of Air Europa, but the company has not commented on this yet.

The other airline acquisitions were also affected by the crisis. Canada’s competition regulator has shown concerns Air Canada’s planned takeover of leisure group Transat. It thinks that the acquisition is not for the benefit of Canadian passengers traveling to sun destinations and Europe.

The final decision would be given by Transport Canada that will complete the public interest assessment till 2 May. They will send a recommendation to the transport’s ministry on whether the deal should be closed or not.

So, the future of this merger depends on the decision taken by the regulators, whereas two other acquisitions are out of the play amid coronavirus crisis. Polish Aviation Group had a plan to acquire German leisure carrier Condor, but in April 2020, the group withdrew the plan. No specific reason was disclosed by the company to withdraw from the acquisition, but the crisis seems to be the only reason as it has affected the market badly.

The merger between carriers Air Nostrum and CityJet is also affected by the crisis. The plans were first stuck in 2018 and now, even though CityJet is saying they are progressing with the merger; the crisis appears to be the barrier.

The market has changed and most companies are now focusing on survival rather than completing the mergers or acquisitions.