British Airways And Iberia Sign Merger Pact

A BRITISH AIRWAYS BOEING 777-236/ER AIRCRAFT. Photo: Airliners.net

San Francisco (THEWILL) - Confirmed reports say British carrier, British Airways and Spain's Iberia have signed a memorandum of understanding to merge, according to Reuters.

The deal which is expected to be formalized in the first quarter of 2010, will see British Airways hold a 55% stake in the new venture. BA already owns a 13% stake in Iberia. 

The $7 billion dollars merger is coming after about 17 months of intense negotiations and will see the new airline having a total of 419 planes and 205 destinations worldwide.

Just like other mergers in aviation, the airlines will maintain their different structures but will form a unified alliance to avoid any conflicts with their individual landing rights at various airports worldwide.

British Airways' Willie Walsh would act as chief executive of the new company, while Iberia's Vazquez Romero will be the chairman.

The merger still has to clear regulatory huddles before it takes off formally.

The new airline will be headquartered in London, United Kingdom.