On November 12 London-based British Airways and Spanish giant Iberia announced they have agreed to merge, effective spring 2010.
The merger creates the world's sixth-largest airline and Europe's third-largest, trailing only Lufthansa and Air France-KLM.
The two companies announced they will operate separately as distinct brands, but their customers should benefit greatly from the tie-up: cooperation between frequent flyer programs, usage of common passenger terminals, code sharing (which increases flight options for consumers by permitting passengers to book legs of a flight on different airlines with one ticket), usage of each other's passenger lounges and more.
The companies stated that fares will not increase as a result of the merger but what will be improved will be the array of flight options the two companies are expected to offer.
The airlines now fly to 205 destinations together, as opposed to just 141 for British Airways and 64 for Iberia. UK customers will have greater access to Vueling's strong Latin American network while Spanish and Latin American passengers will be able to easily tie into the extensive offerings to Europe and Asia provided by British Airways.
With capacity at London's Heathrow Airport nearly maxed out, British Airways passengers could find themselves with a stopover at Iberia's Madrid-Barajas Airport hub on long flights more often, according to UK newspaper The Guardian.
Perhaps most significantly for the future, the merger now adds Iberia to the proposed British Airways alliance with American Airlines on trans-Atlantic routes, which would greatly affect the fares and schedule on many flights offered by the three companies.