Airline News: British Airways and Iberia Merge
The merger gives British Airways investors 55 percent of the business. According to reports in Bloomberg News, the merger won’t be completed until late 2010 and "can be called off by Iberia if BA fails to resolve pension-deficit issues."
The intended merger has been the cause of many airline industry debates over the past year, specifically with Virgin Atlantic executives who say this merger will cause a monopoly in the airline industry.
“It is impossible for any other airline to replicate their scale,” Virgin said in a statement. “Regulators in Europe and the U.S. need to be alert to BA’s growing dominance through proposals such as its monster monopoly with American Airlines, proposals which will not be in the consumer interest.”
However, British Airways maintains the merger will open up competition in the airline industry by forming a network large enough to compete with Air France-KLM Group and Deutsche Lufthansa AG.
At the announcement of the finalized merger, British Airways rose as much as 5.6 percent on the London Stock Exchange, valuing it at 2.52 billion pounds ($4.2 billion), according to Bloomberg.
On the downside, the airlines reported there will be job cuts as part of this merger. No information was given on how many jobs will be cut, from where or what department.
The merger news continues...
British Airways, Iberia and AMR (parent company of American Airlines) have been in talks to create a global alliance that link the U.S., Canada and Mexico with destinations in Europe.
© Cheapflights Ltd Melanie Nayer