IAG will consider selling 20% stake in Air Europa, CEO says

By Joanna Plucinska

BRUSSELS (Reuters) -British Airways-owner IAG will consider selling its 20% stake in Air Europa as the Spanish airline's owner continues talks with Air France-KLM and Lufthansa to sell a stake in the company, IAG's CEO told Reuters.

The move comes as European airlines have called for further consolidation of the sector, with many focusing on key routes in southern Europe as a target for expansion.

"It's something that we are going to decide when (Globalia) take a decision about what they do with the company (Air Europa). We can stay or we can leave," IAG CEO Luis Gallego said on Thursday.

IAG scrapped a deal to buy Air Europa last year after it couldn't convince EU competition regulators that its proposed remedies were sufficient.

TAP STILL ON TABLE

Gallego said IAG was still interested in taking a stake in Portugal's TAP as IAG seeks to pursue a double-hub strategy in Iberia with Madrid and Lisbon as key points.

However, elections in Portugal are set to delay TAP's sale, which means the conditions for any deal are still unclear.

"If there is continuity with the current government, I think the process is going to be delayed maybe two, three months," Gallego said.

"If there is a new government, I think we are going to have a bigger delay."

He added that IAG's interest in TAP was contingent on its ability to be able to integrate the airline into its broader group and processes.

"What we need to see is not only the stake, but also the freedom that you have to manage the company," he said.

(Reporting by Joanna Plucinska. Editing by Mark Potter)