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BA and Iberia support £5bn merger

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BA and Iberia shareholders have approved a 5 billion pounds merger between the airlines

Shareholders of British Airways and Spanish carrier Iberia have voted in favour of a £5 billion merger of the two airlines.

The green light from the shareholders means the creation of a new parent company for the two carriers – International Airlines Group (IAG).

The name BA will no longer be among those listed on the London Stock Market, with IAG taking its place when the deal is finally completed around January 21.

However, both airlines will keep their individual identities, with IAG’s head office being in London and the new company’s annual meetings held in Madrid.

The merged airline will have 408 aircraft carrying about 57 million passengers a year. Between them the two carriers have more than 57,000 staff and fly to more than 250 destinations.

One of the key benefits of the merger to BA is the access it will now get to South America. At present BA flies to only three South American destinations – Rio de Janeiro and Sao Paulo in Brazil and Buenos Aires in Argentina.

Iberia flies to those three cities but also operates to eight other South American destinations. Similarly, Iberia will gain from BA’s more extensive North American operations, with the two carriers able to share information on fares, schedules and routes.

Shortly before Iberia’s shareholders met in Madrid, BA chairman Martin Broughton told BA shareholders at a meeting in Westminster on Monday that the merger had a “compelling, strategic and financial logic” and would benefit staff, passengers and shareholders.

Peter Smith, travel analyst at Travelsupermarket.com, said: “This merger, which will create the third biggest airline group in Europe, is good news for passengers in the long-term.

“Eventually passengers should expect to see better connections, improved timings and more choice of departures to and from Spain and to onward destinations. The airline market between the UK and Spain is one of the most competitive in the world with a rash of low-cost carriers operating routes so we can expect prices to stay low.”

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