British Airways lines up merger with Iberia

According to the chief executive of British Airways, Willie Walsh, the deal to merge them with Iberia could be finalised by the start of 2010. The talks between the Spanish carrier and BA has been going on for 14 months, but Mr Walsh is confident of a deal after Iberia appointed a new chairman, Antonio Vazquez, in the summer. Mr Vazquez was chairman at Spanish tobacco company, Altadis, last year when they were bought by British firm Imperial Tobacco. Mr Walsh would not confirm whether the deal would be done for Christmas, but said it makes good sense and they need to go through the details first.

The major hold-up in the deal has been the pension fund offered to Iberia workers, but that looks likely to be resolved now. BA are also looking at another acquisition in the form of BMI. The current owners, Luthansa, are looking like they might put it up for sale and BA believe they can outbid their potential rivals, Virgin Atlantic, for the airline. Both carriers have shown some interest in the British based airline this year after Luthansa finished the buyout of the firm for £223 million. It is unclear how BA would be able to make the purchase of BMI, but with the news that the third runway at Heathrow may not go ahead, they would be interested in acquiring their landing and take-off slots to make up for the potential short fall in space.