myguideTravel Blog

British Airways and Iberia in merger talks

July 29th, 2008

In the first of what many believe will be a sustained period of consolidation in the global aviation industry, British Airways confirmed today that it is holding talks on an $8bn merger with fellow oneworld alliance member and Spanish rival Iberia.

BA looks set to structure the proposed merger in a similar way to the KLM/AirFrance linkup in 2004 with an overall  holding company operating two distinct airlines according to the guardian

The carriers would be run separately to stay within country specific regulations on the nationality of airlines on specific routes.

Former Aer Lingus CEO and current British Airways chief BA Chief Executive, Dublin-man Willie Walsh told reporters in Madrid today “We will have two airlines, two brands. The day-to-day business of the two airlines will continue as they are today,”

BA has held a minority stake in Iberia for some time and a year ago, walsh declared that they were not interested in a full takeover of the Spanish airline.

This  significantly increase BA’s strength at Heathrow where they already dominate. It will be interesting to watch the reaction of other airlines to this move.

What’s the difference between this and Ryanair’s proposed takeover of Aer Lingus? Is it just the structure of the deal?

Entry Filed under: Airports, Flights, Travel