British Airways’ proposed merger with Iberia took a step closer to completion last night after the Spanish carrier backed BA’s pension deficit strategy.
The merger was agreed in principle back in April, but Iberia had reserved the right to pull out of the deal if it deemed BA’s £3.7 billion pension hole to be too much of a financial risk.
In June BA said it had created a fund totalling some £330 million to address the deficit until 2026.
Shareholders on both sides now have to give the deal final approval, but the Madrid-based airline’s decision to support BA means the tie-up should now be a formality.
An Iberia statement said: “This decision represents another step forward in the merger process.”
The two firms will work under parent company International Airlines Group (IAG), of which BA boss Willie Walsh will become chief executive.
BA will take on 56 per cent of the company while the Spaniards will own 44 per cent.
Report by Martin Ferguson