BA and Iberia are set to merge.
April 9: British Airways and Spain’s national airline Iberia have agreed to merge in an $8 billion (£5.3 billion) deal to create the world’s third-largest airline, called International Airlines Group.
Under the new umbrella company, the two brands will keep their individual identities but rationalise routes and attempt to save over $1 billion of combined annual losses.
BA shareholders will have the controlling stake in the company with 56% of the shares, while Iberia retains the other 44%. It is expected that BA chief Willie Walsh will be Chief Executive Officer of the new company, which will be headquartered in London. It is expected that the merger will be complete by December, reports Reuters.
BA is in the midst of intermittent industrial action by cabin crew staff, but the workers’ union Unite is not against the merger. “We accept the logic of the merger in the challenging economic climate for aviation”, said Steve Turner, Unite’s national officer for civil aviation. “We support this move – but not any cost.”
The only issue left that may scupper the deal is BA’s $5.6 billion pension deficit – Iberia has reserved the right to pull out of the merger if the UK pensions regulator forces BA to ‘plug the hole’.