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British Airways and Iberia merge

by Cointreau  |  2 years, 3 month(s) ago

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British Airways and Spanish Iberia will reportedly merge next year. What's your opinion on this merge? Why have they made this decision and will it really be better for their customers?

 Tags: Airways, British, Iberia, Merge

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  2. Leonardo
    Madrid: Spanish national carrier Iberia and British Airways said Tuesday they were holding merger talks as the aviation sector battles soaring fuel prices that are hitting its bottom line. "We would create the third largest airline in the world in terms of income with more than 16.5 billion euros (26 billion dollars), with the fifth largest fleet of nearly 450 aircraft," BA chief executive Willie Walsh told a joint news conference in Madrid with his counterpart from Iberia, Fernando Conte. A all-share tie-up would rival Air France-KLM, the world's biggest airline that was born in 2004 after the merger of France's national carrier and Dutch peer KLM. It would create an airline that is dominant on both the north and south Atlantic routes. Iberia is the market leader on flights between Europe and Latin America while BA is strong on routes from London to the United States. Under the tentative proposals BA and Iberia, are both part of the "One World" alliance, would retain their separate brands. The dramatic merger plan comes as the world's biggest airlines face commercial headwinds from record high oil prices, which ramp up jet fuel costs, and weak consumer spending that dampens demand for air travel. The adverse business climate has caused the collapse of 25 carriers since the start of 2008. Only airlines owned by oil-producing Gulf states, such as Emirates, appear immune to the aviation downturn. "The aviation landscape is changing and airline consolidation is long overdue," Walsh said earlier Tuesday in a press release. The tie-up talks have the support of both company boards but Conte said they were expected to take several months. BA has had a stake in Iberia since 1999, which it increased to 13.15 percent earlier this year. Iberia announced Tuesday that it had bought a 2.99 percent holding in British Airways and has the option to buy another 6.99 percent. afp
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