The deal, according to the Financial Times, quoting people familiar to the matter, may even be blocked over fears it could lead to higher ticket prices.
In February IAG, which also owns Spanish flag carrier Iberia, struck a deal to buy the 80% it does not already own of Air Europa for around €400m.
The proposed deal has yet to be formally filed for approval in Brussels, but sources claim regulators were readying another lengthy probe.
"This is the second time this merger has been attempted, and it doesn’t look good," a source said, speaking to the FT. "We didn’t like the first one. It’s going to be worse this time around."
As part of the assessment, regulators will look at the impact of the deal "route by route".
