BA and Iberia sign merger agreement
The merger of British Airways and Iberia moved a step closer today after the two airlines signed the agreement approving their tie-up.
BA said it expected the merger to be completed by the end of this year in a move that will create one of the world's largest airline groups, with 408 aircraft carrying more than 58 million passengers a year.
The tie-up will create a new holding company called International Airlines Group, but the airlines will retain their current operations and continue to use their individual brands.
Today's merger agreement follows the memorandum of understanding signed between the two airlines in November.
BA chief executive Willie Walsh said the merged company will provide customers with a larger combined network.
"It will also have greater potential for further growth by optimising the dual hubs of London and Madrid and providing continued investment in new products and services," he added.
The merger is subject to regulatory approval from competition authorities including the European Commission, and to approval by both British Airways and Iberia shareholders.
Iberia will also be entitled to terminate the merger agreement if the pension recovery plan agreed between BA and its pension trustees is found to be "materially detrimental" to the merger.
Rival airlines have expressed opposition to the agreement, with low-fare carrier Ryanair recently likening the merger to "two drunks trying to prop each other up". Virgin Atlantic said the deal would increase BA's dominance at Heathrow Airport.
The merger is expected to produce annual savings of around 400 million euro (£350.9 million) by the end of the fifth year after the merger's completion.
The Independent travel offers: Discover a world of inspiring destinations
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
£40000 - £60000 per annum + Pension, Healthcare : Deerfoot IT Resources Limite...
£30000 - £45000 per annum + Bonus+Benefits+Package: Harrington Starr: VB.NET a...
Unpaid voluntary role: Old Royal Naval College: To assist the Visitor Experien...
£45-£55k OTE £75k : Charter Selection: Major London International Fashion and ...