Iberia and BA one step closer to merger

by Alfie FEATHERSTONE on September 24, 2010

The last major hurtle facing British Airways and Iberia in their bid to merge was the UK-based carrier’s pension deficit approval.

With the popular Spanish airline’s approval of the new funding plan previously agreed upon by the trustees of BA’s pension scheme back in June, the two carriers are now free to unite pending shareholder approval. It was reported that Iberia had retained the right to stop the merger proceedings pending its approval of the pension scheme.

The merger between the two major European airlines will create the world’s third largest carrier. Both carriers have seen staggering losses with the ongoing economic recession, persistent threats of industrial action and the recent Iceland volcanic ash plume that shutdown European air space for nearly a week. As part of a solution to their financial woes, the airlines have initiated a merger to combine their assets.

Said to be worth around US$7.5 billion, the newly formed airline will also extend to OneWorld Alliance partner American Airlines. The US-based airline will continue to help coordinate how services and routes are sold between the EU and US.

With the merger will come new routes to Mexico, Canada, Norway, Switzerland and Puerto Rico, which American Airlines will also manage for the newly formed carrier. The merger is set to become officially after both airlines shareholders have approved the deal and its terms of agreement.

Comments on this entry are closed.

Previous post: Blair highlights potential for West Bank tourism

Next post: 13 dead in German tour bus crash