British Airways and Iberia have reached a preliminary agreement for a merger which is currently expected to be completed in late 2010.
The merger would create the world’s third biggest airline, with Iberia taking a 45% stake and BA a 55% stake in the new company. Last week, BA reported a six-month pre-tax loss of £292m.
Both airlines will retain their brands and the deal will create an airline with 419 aircraft flying to 205 separate destinations, and would save the two partners 400m euros a year in costs.
Iberia’s chairman Antonio Vazquez will assume the same role at the new company, while Mr WillieWalsh will become its chief executive.
Passengers, however, are unlikely to notice any change as a result of the merger and cost savings, although shareholders will.