The German group had been interested in buying a 25% stake in the indebted airline, Spanish news site El Confidencial previously reported, as a way of expanding its presence in key southern European markets.

But Lufthansa said in a statement that “after thorough analyses and intense negotiations we have at this stage decided against further engaging in a capital contribution and shareholding in Air Europa”.

The airline did not give a reason but CEO Carsten Spohr said last week, when the group’s quarterly results were released, that talks with Air Europa were proving difficult.

On Thursday, the Air France-KLM group also said it was dropping out of the running to acquire a stake.

This leaves Turkish Airlines as the only known remaining bidder.

IAG, owner of British Airways, has a 20% stake in Air Europa but last year dropped a bid for a full takeover of the Spanish carrier owing to regulatory constraints.