British Airways has this morning (April 8) announced that it has signed an agreement paving the way for its merger with Spanish carrier Iberia.
The deal will make the loss making companies the second biggest airline in Europe in terms of passenger numbers.
The completion of the merger is subject to regulatory approval from the relevant competition authorities including the European Commission and to approval by both British Airways and Iberia shareholders.
Antonio Vazquez, Iberia's chairman and chief executive, said: "This is an important step in the process towards creating one of the world's leading global airlines that will be better equipped to compete with other major airlines and participate in future industry consolidation. We look forward to concluding the deal before the year end."
Willie Walsh, British Airways chief executive, said: "The merged company will provide customers with a larger combined network. It will also have greater potential for further growth by optimising the dual hubs of London and Madrid and providing continued investment in new products and services."
The news comes amid reports that BA will be renamed International Airlines. According to BA, a new holding company to be known as International Airlines Group will be set up, but both BA and Iberia will retain their individual brands.
Report by Martin Ferguson