BA blames Iberia merger delay on 'technical issues'

British Airways' merger with Iberia of Spain will not take place in the first quarter of this year as planned because of "technical issues", the UK flag carrier said yesterday.

BA was not prepared to go into any detail, saying only that the agreement would be signed "in due course" and blaming delays on "technical issues that need to be resolved".

It is understood the hold-ups are not related to BA's cabin crew strikes – the second of which finished at midnight on Tuesday. The company's £3bn pensions deficit is also not thought to be a factor, although it was central to the 18-month negotiations before the deal was finally agreed in November.

Under the terms of the agreement, BA will hold 55 per cent of the new company, Iberia 45 per cent. The merger should lead to £350m of efficiency savings, the two airlines have said.

Meanwhile, BA yesterday faced another round of complaints from rival Virgin Atlantic over plans for closer links with American Airlines (AA). Ownership regulations preclude a merger between the two carriers, but they have submitted plans to regulators in the US and Europe under which they would share revenues and jointly manage schedules, pricing and capacity on transatlantic routes.

Virgin has vociferously opposed the move since BA and AA first applied for formal Anti-Trust Immunity (ATI) in the US in August 2008. In February, the US Department of Transportation (DoT) launched a 60-day consultation on its preliminary plan to clear the tie-up providing the airlines gave up four pairs of daily take-off and landing slots on the highly competitive London-to-New York route. Virgin's response, submitted to the DoT yesterday, brands the plan as "massively uncompetitive", highlighting the "sheer inadequacy" of the conditions imposed by the department and the "potential competitive harm" if the deal is allowed to proceed.

Virgin also attackedBA's claims that regulatory clearance would allow the Oneworld alliance, to which BA, AA and Iberia all belong, to compete with the much larger Star Alliance and Skyteam groups, both of which already have monopoly immunity on transatlantic flights.

"The fact is that approval of this deal would distort competition further, not restore it," said Sir Richard Branson, the president of Virgin Atlantic. "If the regulators take this decision on the false assumption that a three alliance vision can meet all competitive needs they will be making a big mistake and doing a disservice to consumers."

In a parallel regulatory process, BA last month approached the European watchdog with an offer to lease out four daily pairs of slots from Heathrow, plus another two if the competitive environment between on the London-to-New York route changes. Virgin described the concessions as "woefully inadequate". The EU is also inviting responses from the industry.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before