Breaking Travel News

BA/Iberia tie-up moves a step closer

The rallying stock market could lead to a long-awaited tie up between British Airways and Iberia.

The surge in stocks over the past few weeks could help ease the Spanish flag carrier’s fears about BA’s £2.1 billion pension deficit and lead to the long-awaited link-up.

The Spanish have long been concerned about the massive deficit, which could soar to nearer £3bn when the results of a revaluation of the fund are revealed next month.

BA has ploughed almost £2bn into the fund over the past three years.

However, the summer surge – which saw BA’s shares hit their highest value this year at £2.21 last week – should help boost the value of the fund.


The long-running talks are estimated to save the two airlines more than £200 million each and give BA access to Iberia’s comprehensive Latin America network.

BA is also confident that it will finally gain anti-trust immunity with American Airlines next month, giving it dominance on the once highly lucrative North Atlantic routes.

However, Virgin Atlantic is strongly opposed to the deal and Virgin boss Sir Richard Branson is appearing in front of a Congressional sub-committee this week to argue against it.

The potential go-ahead for the two tie-ups coincides with tentative signs of a long awaited rise in premium passenger numbers, which have finally stabilized after months of falling figures.

Speaking at an event last week organized by travel management company Carlson Wagonlit, Drew Crawley, BA’s director of sales and marketing, said he was confident that long-haul premium traffic would come back.

He pointed to the launch of BA’s all-business service from London City Airport to JFK and its revamp of First class as indicators of the airline’s confidence in the return of the premium market.

In a separate development, American is reported to be in talks with fellow Oneworld alliance member Japan Airlines about investing in the struggling airline with a view to working closer together. JAL has also been approached by Delta Airlines, a member of rival alliance Skyteam.