* Latest airline to seek state help in pandemic
* Madrid wants say on Air Europa's potential sale to IAG
* Air Europa will have up to six years to repay loans
(Adds comments, quotes)
By Nathan Allen
MADRID, Nov 3 (Reuters) - The Spanish government approved on
Tuesday a 475 million euro ($556 million) aid package for Air
Europa, making the airline the first major Spanish company to
tap into funds established to help companies in strategic
sectors weather the pandemic.
The package will comprise a 240 million euro equity-backed
loan and a 235 million euro regular loan, government spokeswoman
Maria Jesus Montero told a news conference.
In return, the government will have a say on Air Europa's
potential sale to IAG, the spokeswoman said, without
giving details on what role Madrid would want to play.
British Airways owner IAG agreed to buy Air Europa for 1
billion euros last November, but is seeking to reduce the price
amid the travel crisis caused by the pandemic.
Montero told reporters the government "reserved the right to
give an opinion and decide criteria" on the possible deal,
without elaborating.
She also said the government wanted to participate in the
nomination of the airline's chief executive and in any layoff
plans.
"In the case of Air Europa, the impact of the pandemic ...
is evident, due to the drastic reduction in air traffic caused
by reduced mobility and fewer tourist arrivals," Montero said
after a weekly cabinet meeting, adding the number of flights
operated by the airline plunged 95% in the second quarter.
Air Europa will have a maximum of six years to repay the
loans, she said.
IAG declined to comment, but referred to remarks by its CEO
Luis Gallego on Friday, who said IAG was waiting to see what
conditions the Spanish government would attach to its help for
Air Europa. Gallego also said IAG had to look at "everything"
about the deal as so much had changed for the airline industry.
Air Europa declined to comment on what the government aid
could mean for talks with IAG.
International travel restrictions have brought the global
transport sector to a grinding halt, pushing several airlines to
rely on state aid.
Air France-KLM received 7 billion euros from the French
government in April, while German flag carrier Lufthansa secured
a 9 billion euro bailout in June.
($1 = 0.8546 euros)
(Reporting by Jesus Aguado, Inti Landauro, Nathan Allen, Belen
Carreno, Emma Pinedo
Additional reporting by Sarah Young in London
Writing by Ingrid Melander
Editing by Mark Potter)