The UK government would not hinder British Airways becoming a Spanish company as a result of a merger with Iberia, according to Transport Secretary Geoff Hoon.
With BA and Iberia close to agreeing merger terms, it is thought that the airlines would continue to operate as separate brands under a new operating company. However, it is unclear whether this parent company would be based in Spain or in Britain. Geoff Hoon told The Times: “We would be completely at ease if the companies took this decision [to base in Spain].”
He added: “Using Heathrow and Madrid as a double hub with combined operations is a strategic advantage for the future and can be tremendously successful. But - and this is crucial in Britain - they are private companies. At one time, it was governments which decided what was the best thing to do. Frankly, I don’t think that governments would be very good at making these types of decisions.”
It is expected that the new company will retain listings in London and Madrid. Mr Walsh is likely to remain chief executive and Fernando Conte, the chairman of Iberia, would become chairman of both airlines.