British Airways announces plans to merge with Spanish airline British Airways announces plans to merge with Spanish airline By Jane Fazackarley Nov 12, 2009 in Business British Airways has announced plans to merge with Iberia, a Spanish airline. The deal has not yet been completed but should be made formal in 2010. Before the deal can be completed it must receive the go-ahead from the European Commission. Once the merger has been made final, the new company will become one of the largest airlines in the world. British Airways (BA) has been struggling due to the recession and other factors. The company recently announced a £292 million loss over the last six months. The merger will mean that a holding company called TopCo is to be set up and BA will retain the biggest share of the business at 55 percent, while Iberia will have a 45 percent share. The two airlines first met for talks back in 2008 to discuss the possibility of a deal. British Airways currently holds a 14 per cent stake in Iberia.

The Spanish airline still has the option of backing out of the plans should BA not find a way of addressing the pensions black hole which exists in its company. The merger will mean the company will own a total of 419 planes and flights will go to more than 200 different destinations. Virgin Atlantic, a rival of British Airways, has some reservations over the deal and the market share it will acquire. Both BA and Iberia have announced heavy losses in the past year and both faced the threat of strike action . The Chairman and CEO of Iberia Airlines Antonio Vázque issued a statement on their website which said: “It has been a long process where many people, both at British Airways and Iberia, have worked very hard to reach this agreement. But in the end it was worth it. This agreement is a giant step in the history of both Iberia and British Airways. We are laying the foundations of what will be one of the most important airlines in the world, a real global airline.

I believe that, thanks to this transaction, which is the most important in the European airline industry in recent years, we are more prepared than ever to face future challenges." British Airways Chief Executive Willie Walsh said: “The merger will create a strong European airline well able to compete in the 21st century. Both airlines will retain their brands and heritage while achieving significant synergies as a combined force.” Union leaders seem to be in favour of the deal and don't forsee job losses as a result. British Airways, Iberia Sign Merger Plan | Miles Away Travel Blog British Airways, Iberia Sign Merger Plan British Airways and Iberia one step closer to merging that BA Holdco SA (a new Spanish company formed on behalf British Airways), Iberia, S.A. and International Consolidated Airlines Group S.A. (IAG) have inked a merger plan document, which is mandatory under Spanish law before a partnership between British Airways and Iberia can be finalized. The timetable for the completion of the merger remains the same. It is expected that both carriers will have meetings with shareholders to get the green light on the transaction, which will take place in November 2010 and be completed before the new year.

The merger can not be completed until approved by the European Commission. Your email address will not be published. Comment Facebook By Weblizar Powered By Weblizar Recent Posts We Want to Know… Tags Sign Up for the CheapOair Newsletter! Download Our App General DisclaimerHide General Disclaimer [+][-] * Instant Discount This $10 off sale applies to our transaction service fees only. All fares displayed above are after the 10 USD instant discount applied. Maximum discount amount is the amount of the transaction service fees for that transaction or 10 USD, whichever is less. Some discounted and other special sale fare offers may not be eligible for this instant discount promotion. This offer may be revised or discontinued without notice. [+][-] ** Promo Code Offer Applies to Domestic Travel only. Book by November 30, 2013. Enter Promo Code at time of check out. The advertised Promo Code provides discounts against our service fees on stated routes. Promo Code and Instant Savings offers can be combined up to the amount of our service fees. Excess savings will not be applied. Promo Code expires on date indicated and can be withdrawn at anytime without notice.

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Due to our large volume, and numerous purchasing sources, we are allowed to bring you many published air fare prices for less than the carriers’ published price. Please note that service fees are charged above the published and/or negotiated air fares and taxes. The value of discount may vary based on fare type availability, seasonality, referral source and destinations. © 2006-2017 Fareportal, Inc. All rights reserved. California: CST #2073455, Florida: ST37449, Iowa: SOT #967, Nevada: SOT #2007-1137, Washington: WASOT #602755832 (Affiliate DBA of Travelong, Inc.) BBC News - British Airways and Iberia sign merger agreement British Airways and Iberia sign merger agreement BA has been considering a merger with Iberia for some time British Airways and Spanish airline Iberia have signed a deal to merge and create one of the world's biggest airline groups. The merger, which was provisionally agreed in November last year, is expected to be completed by the end of this year.

In a statement, the two companies said the merger would benefit shareholders, employees and customers. It is expected to save the airlines 400m euros ($533m; £350m) a year. The new company will be called International Airlines Group, but the BA and Iberia brands will continue to operate as normal. The company will have its headquarters in London, with BA shareholders retaining 55% ownership of the company. Further consolidation In total, the group will operate 419 aircraft, flying to more than 200 destinations, and carry a total of 62 million passengers a year, BA said. TIMELINE: BA-IBERIA MERGER BA chief executive Willie Walsh said the merger would be good for customers. "The merged company will provide customers with a larger combined network," he said. Iberia's chairman and chief executive Antonio Vazquez said the merger was a key move. "This is an important step in the process towards creating one of the world's leading global airlines that will be better equipped to compete with other major airlines and participate in future industry consolidation," he said.

The merger is seen as a chance for the two airlines to cut costs following two very tough years for the airline industry. Both BA and Iberia are expected to report heavy losses this year, with BA predicted to announce its biggest annual loss since privatisation. The airlines are also regarded as a good match, having few overlapping routes. The merger will also allow the company to compete more effectively with other European giants including Air France-KLM and Germany's Lufthansa. The signing of the merger deal follows reports on Wednesday that two US airlines - US Airways and United Airlines - were also in talks over a possible merger. New alliances Analysts welcomed the move in light of the current economic environment in which global airlines are struggling for survival. "The merger makes huge sense for passengers and airlines alike. It will allow participating airlines to spread their cost base, something they desperately need to do," said Ashley Steel, global chair for transport and infrastructure at KPMG. Aviation analyst Laurie Price gives his reaction to the deal Along with other observers, Mr Steel said that the merger was a stepping stone towards a transatlantic alliance with American Airlines.

The new partners may even cast their net wider, said Stephen Furlong at Davy Stockbrokers: "The tie-up with American is the next thing on BA and Iberia's agenda now and this agreement brings that closer, but they are probably looking at European and Asian carriers too." The Unite union, which represents thousands of BA workers, said it supported the deal, but "not at any cost". "Mergers mean synergies, and synergies usually mean job losses and the levelling down of terms and conditions," said Steve Turner, Unite national officer for civil aviation. He said workers must be consulted on any "key decisions" about their future. BA is currently in negotiations with Unite to prevent further strikes by cabin crew, who went on strike for seven days last month over pay and working conditions. Pension problem BA and Iberia are expected to complete the merger by December, subject to approval from regulators and shareholders. One stumbling block could be BA's pension problems. Its two final-salary pension schemes have a combined deficit of £3.7bn, which it needs to cut. Last month, the airline agreed plans with unions to increase pension contributions to close the deficit.

But those plans still need to be agreed with pension trustees and the pensions regulator. They could yet insist that BA pays in more money to fill the deficit. If Iberia is not happy with those demands, a specific clause in the contract allows it to call off the merger deal. Plans for a tie-up between BA and Iberia date back long before the current troubles in the airline industry. The two airlines first began working together in 1999 following the privatisation of the Spanish flag-carrier. BA currently has a 13% stake in Iberia. Bookmark with: British Airways and Iberia Sign Merger Deal - The New York Times The New York Times Global Business |British Airways and Iberia Sign Merger Deal Search Continue reading the main story NEW YORK — A fresh wave of consolidation in the travel industry surfaced this week as British Airways and Iberia of Spain formalized a long-awaited deal to create one of the world’s largest airline groups, and United Airlines and US Airways revived talks to combine operations to form what would be the second-largest U.S. carrier. The moves came amid tentative signs of a recovery from the airline industry’s worst crisis since 2001.

The formalization of the British Airways and Iberia merger on Thursday, which is still subject to approval by European Union regulators, would create a group with a combined market value of roughly $7.5 billion that would be 55 percent owned by British Airways shareholders. The headquarters would be in London. The terms and conditions of the agreement are in accord with a preliminary deal reached in November, the companies said. “The merged company will provide customers with a larger combined network,” said Willie Walsh, the British Airways chief executive, who is expected to head the merged group. “It will also have greater potential for further growth by optimizing the dual hubs of London and Madrid and providing continued investment in new products and services.” Continue reading the main story The two unprofitable carriers said they hoped their combined operation would better equip them to compete with other major airlines and predicted annual savings from the deal of around €400 million, or around $534 million, beginning in 2015. A sizable part of those savings is expected to come from the reduction or elimination of overlapping and unprofitable European routes, analysts said.

Advertisement Continue reading the main story “I suspect there will be increasing retrenchment by the legacy carriers to cut back on short-haul routes, essentially ceding the field to low-cost competitors” like Ryanair and easyJet, said Daniel Solon, an independent aviation analyst in Barcelona. The alliance by British Airways and Iberia is the latest in a spate of airline consolidations that has grown as the recent economic crisis reduced demand for air travel and limited airlines’ access to financing for new aircraft. Since late 2008, for example, Lufthansa — which absorbed Swiss International airlines in 2005 — has acquired Brussels Airlines, Austrian Airlines and, last year, took full control of its British Midland Airways subsidiary. Delta Air Lines and Northwest Airlines of the United States merged in 2008 and last year reached an expanded partnership agreement with Air France-KLM that seeks to control about 25 percent of passenger flight capacity between the United States and Europe. A combination of United and US Airways — both part of the Star Alliance, the largest global airline alliance — could help both return to profit faster than they could going it alone.

United Airlines and US Airways have recently resumed talks about a possible merger that would create the second-largest U.S. airline, after Delta, people briefed on the matter said Wednesday. But mergers in the airline industry have been difficult to accomplish, in part because complex labor contracts can offset the promised cost savings. The latest combination, involving Delta and Northwest, creating the largest U.S. carrier, took nearly two years to complete. One reason that merger succeeded was that Delta and Northwest negotiated a seniority plan and a new collective bargaining agreement with the pilots, enabling the two companies to integrate their operations faster and more smoothly. Disclosure of the talks could spur other airlines, like Continental and American Airlines, to consider bidding for United or US Airways, analysts said. Please verify you're not a robot by clicking the box. Invalid email address. Please re-enter. You must select a newsletter to subscribe to. Sign Up Privacy Policy “The success of the Delta-Northwest merger is reinvigorating consolidation discussions in the industry,” said William S. Swelbar, a research engineer with the International Center for Air Transportation at the Massachusetts Institute of Technology.

Combining the British and Spanish flag carriers would create a company with about $22 billion in revenue, the companies said last year. The merged entity would operate a fleet of more than 400 aircraft flying 200 destinations and carrying more than 58 million passengers a year. The group said it planned to retain the British Airways and Iberia brands. Advertisement Continue reading the main story British Airways and Iberia recently received tentative approval from U.S. and European regulators to deepen an existing partnership with American Airlines that aims to create a unified network of about 500 possible destinations in more than 100 countries. All three carriers are members of the Oneworld alliance, which also includes Japan Airlines, Cathay Pacific and Qantas. Antonio Vázquez, Iberia’s chairman and chief executive, hinted that the merged group had potentially broader global ambitions, noting that it would be well equipped to “participate in future industry consolidation.” Analysts said they would not be surprised if a combined British Airways-Iberia group sought to acquire other airlines. “I suspect that everyone in the industry is going in that direction,” Mr. Solon said.

“Airlines are setting themselves up with new ownership structures that leave the doors open and the bearings greased for that.” British Airways and Iberia said they expected to complete their merger by the end of 2010. Shareholders would be asked to vote on the deal in November, with E.U. regulatory approval expected by December. As agreed last year, British Airways shareholders would receive one share of the new holding company, International Consolidated Airlines Group, for every British Airways share held and Iberia shareholders would receive 1.0205 new shares for every Iberia share held. The holding company, while headquartered in London, will be incorporated in Spain for tax purposes. Shares of Iberia rose 1.9 percent Thursday, while British Airways rose 2.9 percent in London. Under the terms of the agreement signed Thursday, Iberia still retains the right to pull out of the merger if British Airways fails to find a “satisfactory” solution to finance a £3.7 billion, or $5.65 billion, deficit in British Airways’ employee pension plan by the end of this year.

The airline and its three main unions agreed last month to restructuring of the pension plan, though that deal has yet to be approved by employees, pension trustees and British regulators. Signing the merger agreement with Iberia, after more than two years of arduous negotiations, provided a rare bit of good news for Mr. Walsh after months of mounting labor unrest at British Airways. The carrier was obliged to cancel hundreds of flights last month — at a cost of up to £45 million — after the union representing its 13,500 flight attendants walked off the job for seven days to protest a wage freeze and cuts to in-flight staff levels. The union, Unite, said late Wednesday that it had put off plans for any further strike action this month after talks with airline management this week showed “serious progress” toward a resolution. Explore our past: 2010 - present | About BA | British Airways Explore our past Explore our past: 2010 - present Show allHide allshowhideexpandedcollapsed British Airways celebrated 80 years of flying to India. May OpenSkies, British Airways’ all-business class subsidiary, made its maiden flight, from Paris Orly to Washington Dulles on 3 May.

June On 23 June British Airways introduced a new cabin crew team at Heathrow, Mixed Fleet. This team operates a mix of both long and short haul routes and is additional to existing cabin crew teams who operate either long or short-haul routes. On 29 June, British Airways and Iberia signed a merger plan document. This set out the legal steps that were required once shareholder approval was given at the end of November that year. Flying Start was launched on 30 June. This is British Airways’ new global charity partnership with Comic Relief replacing the ‘Change for Good’ partnership with UNICEF. August On 31 August, the new Boeing 777-300ER made its inaugural commercial flight, to Mumbai. It featured all-new cabins and a new in-flight entertainment system. September The transatlantic joint business agreement between British Airways, Iberia and American Airlines was signed on 29 September and commenced on 1 October. On 13 September, a new route from London City Airport to Copenhagen was launched. October Explore our past: 2011 January The merger between British Airways and Iberia was completed on 21 January forming International Airlines Group (IAG).

Willie Walsh took up the position of Chief Executive of IAG and Keith Williams became Executive Chairman of British Airways within the IAG group. On 24 January, IAG shares started trading in both London and Madrid. British Airways Maintenance at Cardiff (BAMC) pioneered and introduced a new Seat Crane to facilitate more efficient removal and replacement of aircraft seats after servicing. February British Airways launched a new Heathrow to Tokyo route on 19 February to Haneda. British Airways then served two Tokyo airports; Haneda and Narita. March Heston Blumenthal’s series ‘Heston’s Mission Impossible’ was aired on TV on 8 March. This included a look at the catering challenges faced by British Airways when serving food at 30,000 feet. On 12 March, as part of Red Nose Day, 188 people joined comedians Dara O’ Briain, Jack Whitehall and Jon Richardson on board a British Aircraft for the ‘Highest Comedy Gig in the Sky’ at 35,000 feet. The ‘Smile High Gig’ raised almost £100,000.

On 27 March, British Airways inaugurated a non-stop service from Heathrow to Buenos Aires. May Heathrow – Terminal 5 C opened for business. This was the third and final part of the T5 building and operational programme. British Airways and Iberia Cargo operations were merged to become IAG Cargo. The new combined cargo business became a unit reporting directly to IAG. September British Airways Engineering hosted Open Days at the Heathrow base in early September. This included, for the first time, a customer day. A major new brand and advertising campaign was launched at the end of September. This was based on the British Airways motto of ‘To Fly, To Serve’ and included a unique TV advert called ‘Aviators’, which was premiered on Facebook – a first for the airline. November On 16 November, the Executive Club was relaunched and Avios replaced Air Miles as the currency for this loyalty programme. Explore our past: 2012 January British Airways introduced a special blend of Twinings English Breakfast tea for customers on board flights. On 18 January, the ‘Dove’ design of the British Airways Olympic and Paralympic Games aircraft was unveiled.

The design, chosen by Tracey Emin, transformed the aircraft into the bird of peace, and was designed by up and coming British designer Pascal Anson. On 20 January, British Airways celebrated 80 years of flying between London and Cape Town. In 1932 it took the Imperial Airways multi plane service 11 days to complete the journey. Sir Ross Stainton former Chairman of British Airways died aged 97. February The Race, British Airways’ new 60-second TV commercial, was unveiled on 8 February it featured suitcases from different countries racing through the baggage system to herald the run up to the London 2012 Olympics. March British Airways through its own staff initiatives and also on board collections raised £1.8 million towards the Sport Relief total of £50 million during March. On 26 March, British Airways launched a Long-haul service between London and Moscow. This replaced the previous short haul offering so for the first time customers could enjoy the Club World flat beds on the four hour flights. IAG and JAL agreed a Joint Business arrangement to come into effect in October. This covered a joint business on Eastern routes via Siberia.

British Airways City Flyer became the first airline to offer self-service baggage tagging at London City Airport. April IAG finalised the purchase of bmi following EC approval on 31 March. The winning creation in the art category of the Great Britons campaign, the Dove, was featured as a new livery for nine aircraft in the lead up to the Olympics. May British Airways flew the Olympic Flame from Athens to the Naval Air Station, Culdrose in Cornwall on 18 May. A flame lighting ceremony took place on the tarmac following its arrival on an Airbus A319 named ‘Firefly’ reflecting its unique livery. June On 19 June, OpenSkies introduced a three-class service with an Eco cabin joining the Biz Bed and Premium Plus cabins. Launch of the ‘Home Advantage’ tactical advertising campaign linked closely to the London Olympics. First TV ad on ITV on 19 June had a Boeing 777 complete with customers taxiing through London to the Olympic Park. July Lord Marshall of Knightsbridge, former Chairman and Chief Executive of British Airways, died on 5 July aged 78.

On 27 July, the London Olympic Games began and British Airways Park Live facility was opened for visitors to relax in and enjoy watching the action on giant TV screens. August The Olympic Games closed on 12 August and British Airways announced that over 400,000 people had visited ‘Park Live’ during the Games. September ‘Firefly’, the British Airways aircraft that flew in the Olympic flame performed a fly-past over The Mall as part of the Greatest Team Parade to celebrate the success of the British Olympic and Paralympic teams. October IAG and JAL launched their new joint business arrangement. On 27 October, the very last bmi commercial flight touched down at Heathrow. This was part of the full integration of bmi into British Airways. November On 19 November, the British Airways ‘Best of British’ event raised over £75,000 for the Flying Start charity enterprise. Gary Barlow led a roll call of stars including Stacey Solomon, John Culshaw and Matt Cardle who performed at the event.

December Explore our past: 2013 January Launch, on 10 January, of a new tea blend adapted to work at 35,000 feet created exclusively by Twinings for British Airways. February Launch of hand baggage only air fares on some routes from Gatwick from 19 February and all Gatwick flights from 12 March. On 25 February, British Airways was voted top airline in the Consumer Superbrands listing. March British Airways increased its London to Shanghai schedule to a daily service from 31 March. On 11 March, British Airways had a ‘Gig in the Sky’ to raise money for Comic Relief. This event made it into the Guinness Book of Records as Highest Concert at 43,000 feet. April British Airways celebrated 10 years at London City Airport on 2 April. May British Airways won an award for its Home Advantage campaign run during British Airways sponsorship of the 2012 Olympics. This was at the Marketing Week Engage Award In the ‘Travel and Leisure’ category on 22 May. June On 11 June, of British Airways launched Service Hallmarks for staff to enhance and deliver new customer service standards.

On 14 June, British Airways passed the £5m mark in the total raised by Flying Start for Comic Relief since it began in June 2010. From 17-21 June, British Airways was featured in a BBC2 programme ‘Airport Live’. The programme included some pre-recorded as well as live segments and involved many British Airways staff. Arrival of British Airways first Boeing 787 – Dreamliner – at London Airport on 27 June. July First commercial flight of Airbus A380 from London to Hong Kong on 22 October. November On 22 November, British Airways celebrated 80 years of flying to Singapore with a fashion show in which local British Airways cabin crew modelled several generations of uniforms. British Airways launched an interactive advertising campaign on 19 November. The #Lookup campaign saw children on billboards point to and identify British Airways aircraft and their flight numbers as they flew overhead. December British Airways became the first airline in Europe to allow its passengers to use their hand held electronic devices during all aspects of flight such as taxiing or take off.

Davina McCall hosted a star-studded ‘milestone in the sky’ event to celebrate British Airways raising more than £6m for Flying Start/Comic Relief. Keith Williams, British Airways’ Chief Executive became British Airways’ Executive Chairman on 1 January. British Airways Maintenance Glasgow completed work on its 500th Airbus aircraft on 30 January; an important milestone. A special event took place to celebrate this achievement. British Airways backing for Sport Relief got underway on 30 January with a cha-cha session at Waterside. British Airways had set itself a target of raising £2m during 2014 through Flying Start for Comic Relief. February First British Airways commercial flight of an Airbus A380 to Johannesburg on 13 February. British Airways was named as Consumer Superbrand of the Year for 2014. The airline was the first airline or travel enterprise to top this poll beating well known global brands such as Coca-Cola, Apple and Kellogs. March British Airways trialled Fish and Chips on a selection of short-haul routes from 14 April.

On 15 April, Solena Fuels confirmed that it will build the world’s first facility to convert waste into jet fuel in partnership with British Airways. The plant will be to the East of London. May On 21 May it was announced that a team of nine British Airways apprentices had been selected as finalists in the Brathay Apprentice Challenge. British Airways started flying between Edinburgh and Ibiza on 23 May; Radio 1 DJ Edith Bowman was on hand to celebrate the launch with staff. The Glasgow Flying Start Ball raised an Impressive £40,000 for British Airways’ official charity Comic Relief. June The first episode of a three-part weekly BBC documentary about British Airways was aired 2 June. This was called ‘A Very British Airline’ and was produced by Lion TV. The first episode was watched by 2.8m viewers. On 16 June, the airline announced changes to its short-haul cabin which would be introduced on 94 aircraft from October 2014. The new design featured new charcoal coloured seating, with more knee space for customers and the addition of a seat-back tablet holder, so that customers can watch films easily on their own devices.

British Airways flight codes were added to 174 Vueling services on 18 June under a code-share agreement. Vueling is owned by IAG as are British Airways and Iberia. July The first of 95 aircraft which are due to be refitted with new short-haul cabin made its debut with a flight to Venice on 4 July. On 22 July, British Airways unveiled a refreshed First check-in area in Terminal 5 with a range of new enhancements. Also on 22 July, British Airways opened a new Crisis Management Centre. This state-of-the-art unit is activated in the event of an incident or major disruption and will also be used as a training facility. British Airways’ Fun Run on 24 July, raised over £11,000 in support of Cancer Research UK. A team of nine British Airways apprentices came third in the Brathay Apprenticeship Challenge finals held in the Lake District. There were 110 teams when the challenge began. August British Airways announced that customers may hold provisional bookings for 72 hours for as little as £5 short-haul and £10 long-haul. If they choose to confirm the booking then the deposit is refunded.

September On 16 September, British Airways inaugurated a Boeing 787 service to Calgary. On 30 September, British Airways opened a brand new lounge at Washington Dulles airport and this coincided with the inauguration of the Airbus A380 service from London. British Airways kicked off the ‘Around the World in 8 days’ fund-raising challenge on 11 September. British Airways colleagues ran, pedalled, rowed, walked and swam to complete the challenge with two days to spare. October On 27 October, British Airways began services to Chennai with a Boeing 787. On 29 October, British Airways inaugurated Airbus A380 services to Singapore and Gwyneth Paltrow was on hand to help the celebrations. November It was announced that Flying Start, British Airways charity partnership with Comic Relief had raised over £9m since its launch in June 2010. A new service which enables Premium passengers to pre-order their main course was announced on 18 November. It launched on six long-haul routes with more to be added in 2015.

On 28 November, It was announced that Executive Club membership cards will have a digital facility to enable their use with mobile smart phones on Apple and Android devices. December British Airways launched a new Rail/Air ticket scheme on 5 December. This is the result of an agreement with two rail companies to enable customers to book a combined Rail and Air ticket for journeys from Wales and the West of England to Heathrow and then on to a British Airways flight. From 17 December, British Airways became the first airline to be granted approval to overhaul its own Airbus A380 evacuation slides. British Airways name will disappear from FTSE if Iberia merger goes ahead | Business | The Guardian British Airways name will disappear from FTSE if Iberia merger goes ahead The new holding company, International Airlines Group, will have its primary listing in London Thursday 8 April 2010 14.29 EDT First published on Thursday 8 April 2010 14.29 EDT Close This article is 6 years old The name British Airways will disappear from the FTSE and be replaced by the new holding company International Airlines Group if its long-awaited merger with the Spanish carrier Iberia goes ahead.

The two airlines will continue to operate under their respective brands. The airlines announced that they had signed the proposed merger agreement outlined last year and hoped to complete the tie-up by the end of 2010. Shareholders will exchange their holdings in BA and Iberia for new shares in International Airlines Group, which will have its primary listing in London and a secondary listing in Madrid. A spokeswoman for BA said the companies wanted a name that did not refer to Britain or Spain , to make it easier to incorporate any other airline in the future. Shareholders will vote on the proposed tie-up in November. Iberia must also approve BA's plan to tackle its £3.7bn pension deficit . Both airlines badly need the deal to go ahead. Iberia made an operating loss of €475m (£416m) last year, which it said was "one of the most difficult periods of its history". BA, after posting a record £292m pretax losses in the first half of the current financial year, improved in the third quarter, but only after slashing costs and flights. BA has been particularly hard hit by the economic slowdown, as it used to rely on business passengers for half of its profits.

Business traffic has slumped as banks and other corporate customers cut costs. Combining the companies will yield cost savings of €400m (£350m) a year within five years. It would also enable them to co-ordinate routes so passengers could easily transfer between the two carriers. BA passengers will find it easier to travel to South America, where Iberia operates many routes, for the 2014 World Cup and 2016 Olympics. International Airlines Group, which would be worth almost £5bn at current stock market prices, will own more than 400 aircraft, fly to 200 destinations, and carry 58 million passengers a year. The airline would be the world's sixth-largest by passenger numbers, and Europe's third-largest by revenue. Signing the memorandum of understanding proposed in November rubber-stamps the equity structure of the new business, weighted 56% to 44% in the British carrier's favour. Iberia's chairman, Antonio Vázquez, will head the new board, with BA's Willie Walsh as chief executive. The agreement will end 90 years of national independence for BA, though the new company will be headquartered in London.

BA is also proposing a tie-up with American Airlines that will allow them to collaborate over fares and scheduling – currently illegal. The tie-up could be completed by the end of 2010, providing it gets the green light from competition authorities in Europe and the US. Walsh reiterated his belief that the deal would be good for passengers. But rivals have said that the Iberia merger smacks of desperation and would result in higher fares and less competition. Michael O'Leary, chief executive of Ryanair, said: "I would characterise it as two drunks ... holding each other up on the way home. All you get when you put two high-fare, loss-making airlines together is even higher fares and even bigger losses." Sir Stelios Haji-Ioannou, founder of easyJet, invoked the same image: "This is the classic story of two drunks that believe they can walk better together by supporting each other." British Airways and Iberia sign merger deal - Wikinews, the free news source British Airways and Iberia sign merger deal From Wikinews, the free news source you can write! A British Airways Airbus A321-200 Image: Adrian Pingstone.

British Airways (BA) and the Spanish airline Iberia have signed a merger deal, which will create one of the largest air carrier groups in the world. The two announced the merger yesterday, and said that the deal, which has been expected for a long time, is to be implemented by the end of 2010. The move will make a group with a market value of US $8 billion. The deal has been negotiated since July 2008. Under the plan, both companies keep their own brands and operations, but will be owned by International Airlines Group , a new holding company. It will be listed in London , but taxed in Spain. The airlines believe the merger will save $530 million annually. In February, BA reported a loss of $102.4 million for the final three quarters of 2009, whilst Iberia posted an operating loss of $629 million. Meanwhile, investors in BA will receive an IAG share for every BA share they own, and stockholders in Iberia 1.0205 shares for each share in the Spanish airline; thus, BA shareholders will take 55% of IAG.

"The merged company will provide customers with a larger combined network," commented BA chief executive Willie Walsh . "It will also have greater potential for further growth by optimising the dual hubs of London and Madrid and providing continued investment in new products and services." Meanwhile, Iberia chief executive Antonio Vázquez remarked: "This is an important step in creating one of the world's leading global airlines that will be better equipped to compete with other major airlines and participate in future industry consolidation." Independent aviation specialist James Halstead said he believed the merger was necessary for BA to remain competitive amongst other European air carriers. "BA's unique position at Heathrow could help it survive for a short while, but in the long run it needs more than just Heathrow. The main point of the Iberia deal is to be able to cut costs and put the combined company in the position that Air France-KLM and Lufthansa are already in," he said, quoted by The Independent . Have an opinion on this story? Share it!

Related news British Airways-Iberia merger to bring world closer for their customers | The Independent British Airways-Iberia merger to bring world closer for their customers Sunday 15 November 2009 00:00 BST Click to follow The Independent Travel On November 12 London-based British Airways and Spanish giant Iberia announced they have agreed to merge, effective spring 2010. The merger creates the world's sixth-largest airline and Europe's third-largest, trailing only Lufthansa and Air France-KLM. The two companies announced they will operate separately as distinct brands, but their customers should benefit greatly from the tie-up: cooperation between frequent flyer programs, usage of common passenger terminals, code sharing (which increases flight options for consumers by permitting passengers to book legs of a flight on different airlines with one ticket), usage of each other's passenger lounges and more. The companies stated that fares will not increase as a result of the merger but what will be improved will be the array of flight options the two companies are expected to offer. The airlines now fly to 205 destinations together, as opposed to just 141 for British Airways and 64 for Iberia.

UK customers will have greater access to Vueling's strong Latin American network while Spanish and Latin American passengers will be able to easily tie into the extensive offerings to Europe and Asia provided by British Airways. With capacity at London's Heathrow Airport nearly maxed out, British Airways passengers could find themselves with a stopover at Iberia's Madrid-Barajas Airport hub on long flights more often, according to UK newspaper The Guardian. Perhaps most significantly for the future, the merger now adds Iberia to the proposed British Airways alliance with American Airlines on trans-Atlantic routes, which would greatly affect the fares and schedule on many flights offered by the three companies.

Question: British Airways announced a merger with which other airline in 2010?
Answer: Iberia