BA and Iberia miss merger deadline

BA and Iberia miss merger deadline

British Airways’ merger with Iberia will not take place in the first quarter of this year as planned because of “technical issues”. However BA has quashed speculation that this was due to the disruption caused by the cabin crew strikes.

The British and Spanish flag carriers had planned to seal the merger by a deadline of 31 March 2010 but neither carrier was able to say when the process would get back on track.

A BA spokeswoman said: “We will not sign the merger agreement with Iberia in the first quarter of 2010. This is due to technical issues that need to be resolved and we anticipate that the agreement will be signed in due course.”

It is understood the hold-ups are not related to BA’s cabin crew strikes – the second of which finished at midnight on Tuesday. The company’s £3.7bn pensions deficit has also been ruled out as a factor, despite it being the main sticking point in the 18-month negotiations before the deal was finally agreed in November.

According to Spanish media reports, the technical issues include legal problems that have to be agreed before both sides can sign the deal. It could be mid-April before the lawyers are happy with the agreement.


An Iberia spokesman said: “The deal will not be signed in the first quarter nor by the end of the week, but shortly. We are ironing out technical issues. These have nothing to do with the BA strike or the BA pensions issue.”

Meanwhile, Virgin Atlantic has stepped up its attack on BA over its proposed alliance with American Airlines, by calling upon the US Department of Transportation (DoT) to block the alliance. The alliance would allow BA and AA effectively to merge their transatlantic operations.

In February the DoT launched a 60-day consultation on its plan to clear the tie-up providing the airlines surrendered four take-off and landing slots on the London-to-New York route.

Virgin’s latest response brands the plan as “massively uncompetitive”.

Sir Richard Branson, the president of Virgin Atlantic, said: “The DoT seems determined to approve an agreement which threatens severe competitive and consumer harm and one of the primary justifications seems to be to preserve parity amongst the large global alliances. This is not a reason for approval.”