International Airlines Group (IAG) has pulled out of a deal to acquire Air Europa.

The aviation giant originally agreed to purchase the carrier from owners, Globalia, for €1 billion in late 2019.

IAG had planned to acquire the entire issued share capital of the Spain-based airline through its Iberia subsidiary.

The price was cut €500 million earlier this year, in the wake of the Covid-19 pandemic, while the Competition & Markets Authority (CMA) also said it would examine the transaction.

IAG reportedly offered to give up 13 short and medium-haul routes and two long-haul routes at Madrid and Barcelona airports in response to competition concerns.

However, this may not have been enough to assuage the concerns of regulators.

A brief statement today, however, said the deal was off.

“A further update will be made in the future, as appropriate,” IAG added.