British Airways To Merge With Iberia Airlines

A deal has been struck between British Airways and Iberia Airlines to create the world’s largest airline. The joining of forces of the UK and Spanish airlines was arranged in November 2009 and should be completed by the end of 2010.

Company officials from both airlines have stated it would benefit shareholders, employees and most of all its customers. The two airlines will continue to trade in their own brand names but will be known collectively as International Airlines Group.

The merger is expected to save the company’s 400 million Euros a year, meaning cheaper fares for its customers, though some job losses are expected. The headquarters will be based in London with the BA shareholders retaining 55% ownership.

Both airlines are expected to announce major annual losses and the merger has contributed to this, it is seen as a good merger as they have very few routes that cross paths so there won’t be much change to the routes they provide at present.

The only remaining stumbling block is BA's pension problem with a £3.75bn deficit which it needs to address there is a clause that if Iberia is not happy with BA's plan to combat the problem they can call the merger off.