BA and Iberia shareholders give go-ahead to $9bn merger

BRITISH AIRWAYS and Iberia Lineas Aereas de España shareholders yesterday gave the go-ahead for a $9 billion (€6

BRITISH AIRWAYS and Iberia Lineas Aereas de España shareholders yesterday gave the go-ahead for a $9 billion (€6.85 billion) merger that will extend the British company’s dominance of lucrative transatlantic routes and close the gap on European market leaders Air France-KLM and Lufthansa.

Iberia’s owners backed the plan and three British Airways (BA) resolutions approving the deal won support from more than 99 per cent of voters.

The union for the British carrier’s cabin crew marked the occasion by announcing plans for a strike ballot in a 21-month dispute over pay and staffing levels.

BA chief executive Willie Walsh said he is planning further purchases in a push to cut costs and penetrate new markets. The London-based carrier tapped a surge in demand for business flights to post its first profit in two years in the three months to September 30th after Iberia returned to profit in the second quarter. Mr Walsh said yesterday that fresh walkouts by flight attendants would not deflect from recovery.

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“The merger news means they can get on with details like co-ordinating flight schedules,” said John Strickland, director of the JLS aviation consultancy. “The strike threat is another aggravation and it’s hard to understand why this dispute hasn’t been resolved. BA seems to have made some kind of a compromise.”

The shareholder votes pave the way for the carriers to combine under the International Consolidated Airlines holding company. The transaction is scheduled to take effect on January 21st after gaining British high court approval on January 19th, they said.

“The aviation industry is moving towards consolidation and we need to be sure we are playing an active role,” BA chairman Martin Broughton said. Iberia’s Antonio Vazquez said it needs to become “a main player within a big airline group”. – (Bloomberg)