Combined BA and Iberia finally nearly here

It has been a while coming, but British Airways and Iberia are finally fully clear to begin their merged future after securing shareholder approval for the tie-up. The companies will begin merged life under the International Airline Group holdings structure on 24 January, almost two and a half years after the planned deal was first announced.

ba iberia.jpgBack in July 2008, when merger talks were first announced, it seemed to put the European oneworld carriers at the front of the consolidation queue. But cross-border mergers – even within the single European market – are never straight-forward, and this one was further complicated by sharp falls in the stock market which accompanied the global financial crisis and the UK carrier’s pension deficit. In ther intervening period, a number of other carriers have agreed and completed mergers of their own.

At the time of the merger announcement in July 2008, the combination of BA and Iberia would have ranked it third in the world by revenue - putting it behind only Lufthansa and Air France-KLM at the time. But after probably the toughest two years in history for network carriers and a series of mergers including Delta/Northwest and United/Continental, the enlarged BA/Iberia will now be the seventh largest in the world by revenues based on the 2009 Airline Business World Airline Rankings:

1. Lufthansa $31.0bn

2. Air France-KLM $29.6bn

3. United/Continental $28.9bn

4. Delta Air Lines $28.1bn

5. FedEx  $21.5bn

6. AMR Group $19.9bn

7. International Airlines Group (British Airways/Iberia)  $18.9bn

The merger is being put together through the International Consolidated Airlines Group, under which Iberia and BA Holdco will be combined under a single holding company. BA will hold 56% of the combined entity, with Iberia having the remaining 44%. Other key facts on the combined carrier:

Fleet size: 406 

Destinations: 204 

Revenues €13.8bn

Passengers 58 milliion



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