Vazquez vows to pursue BA Iberia merger
22 / 07 / 2009
IBERIA’S new chairman, Antonio Vazquez (right), has stated that he will pursue the merger with British Airways (BA) that has come to a halt in recent months.
“I’ve come to Iberia with the objective of closing a deal with British Airways,” he said adding that negotiations “cannot go on for much longer.”
If the two carriers do merge then the new airline created would handle over a million tonnes of cargo a year, based on 2008 figures: BA handled 777,000 tons and Iberia 242,000. This would make it the largest operator on Europe-Latin America routes but still third in Europe behind Air France-KLM and Lufthansa.
Problems with the merger emerged when Iberia expressed concerns over BA’s pension deficit, which is estimated at around £3 billion – twice the company’s market value. In addition, BA wanted 65 per cent of the merged airline but is now willing to accept a 50:50 split.
The two are seeking approval from both European and American competition regulators, concerned over its potential dominance of certain routes.