BA and Iberia complete merger as strike threat looms

Jan 21, 2011, 14:12 GMT

London/Madrid - British Airways (BA) and Spain's Iberia formally completed their merger Friday that will rank the new company among the world's top six airlines and the third-biggest carrier in Europe.

A British Airways spokesman confirmed that BA and Iberia registered their merger in the Madrid Mercantile Register, thus making it effective.

Shares of the new holding company, International Consolidated Airlines Group (IAG), will be listed on stockmarkets in London and Madrid on Monday.

The completion of the merger comes 24 years after BA's privatization under the government of Margaret Thatcher, when it joined the London stockmarket in a high profile flotation that was 11-times oversubscribed.

BA and Iberia, which will both retain their separate brands, hope that the merger will save the new group an annual 337.3 million pounds (539 million dollars) by its fifth year.

The new company will have 419 aircraft flying to 205 destinations and will be Europe's third-biggest airline by market value after Lufthansa and Air France-KLM, analysts said.

BA, which returned to profit last October for the first time in two years, hopes to benefit from Iberia's strong presence in South America, while Iberia will code-share flights on transatlantic routes.

BA chief executive Willie Walsh will step down to take up the same role at IAG in a move that will see his basic pay rise by 12 per cent to 825,000 pounds a year.

Meanwhile, BA was Friday facing the prospect of a further wave of strikes in a long-running dispute with cabin crews that has already cost the airline 150 million pounds over the past year.

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