News
The last major obstacle to the $8bn (£5.1bn) merger of BA and Iberia has been cleared after the Spanish airline approved a new funding plan for BA's multibillion-pound pension deficit.
Iberia had the right to walk away from the deal to create the world's third-largest airline if it didn't like the terms of the revamp that BA struck with trustees of the pension scheme in June.
The Spaniards made their decision following a board meeting in Madrid, and it was immediately welcomed by BA, which has been plagued by industrial unrest after the airline announced moves to cut jobs and reform working practices.
"Our merger plan is now very much on target," said a BA spokesman.
Regulators in Europe have already approved the deal, which should be completed by the end of the year. Shareholder backing is expected in November.
Once finalised, BA investors will control 56% of the combined company, to be called International Airlines Group (IAG). Iberia shareholders will hold 44%.
BA's chief executive Willie Walsh earlier this month disclosed that he had drawn up a shortlist of 12 airlines he would like to buy once the merger with Iberia had been completed. The list emerged following detailed conversations with Antonio Vazquez – his opposite number at Iberia – to ensure that IAG is at the forefront of the next round of industry consolidation.
Takeover targets are understood to include Qantas, South African Airways, Finnair and at least one low-cost operator.
If all goes to plan, Walsh will become chief executive of IAG and Vazquez chairman.
Walsh said recently: "We want to be attractive to like-minded airlines … airlines who believe in global consolidation." He dismissed concern that global consolidation would be bad for the travelling public, saying that the various mergers that had taken place to date had not hurt competition.
The Unite trade union has threatened to escalate the cabin crew dispute at BA to a company-wide confrontation by consulting 30,000 BA staff over a "co-ordinated response" to allegations of union-busting.
Tony Woodley, joint general secretary of Unite, said he was calling a meeting of shop stewards to warn staff that BA was determined to reduce Unite's power within the carrier. BA has denied accusations it is attempting to break trade unionism at a business where Unite has considerable influence, representing about three-quarters of BA's 40,000 staff.
