Luis Gallego, the chief executive of Aer Lingus and British Airways' parent IAG, said today a deal over the protracted acquisition of Spanish low-cost airline Air Europa may take at least 18 months.

"We have to decide on a calendar to take 100%, but I think it would take minimum 18 months," Gallego said during an event called 'Wake Up Spain,' held in Madrid.

He did not detail how much IAG would eventually pay for Air Europa.

The company will also have to secure competition approvals in several countries, Gallego said.

IAG announced in late 2019 it had agreed to buy its smaller rival for €1 billion with the goal of building a big hub in Madrid, but the Covid pandemic and competition concerns derailed the merger.

As the pandemic tipped the airline industry into crisis, hitting Air Europa particularly hard, shareholders in both companies agreed to cut the deal's price tag to €500m.

Spain's government approved a €475m rescue package for Air Europa in November 2020, a part of which could be converted into equity, meaning the Spanish government has also been involved in the talks since then.

Negotiations had all but ground to a halt until last month when IAG agreed to grant Air Europa a €100m loan convertible into a 20% stake.

Separately, Gallego said the company expected to operate at 90%-95% of its pre-pandemic levels this summer.