American Airlines and British Airways, leaders of the oneworld alliance, have reached a tentative agreement with Iberia's state holding company to acquire jointly a 10% stake in the Spanish flag carrier as it is transferred into private ownership. The agreement, which signals the next likely move to bolster the new alliance membership, should be finalised within weeks.

The two airlines' plans to become involved in the Iberia privatisation emerged earlier this year. Recent negotiations were undertaken directly between BA's chairman, Bob Ayling, and Pedro Ferreras, chairman of Iberia's state holding corporation SEPI. It is expected that BA will take a shareholding of between 8.2% and 9.1%, with the remaining 0.9-1.8% being held by American.

The next stage in Iberia's privatisation process will involve shareholdings being acquired by Spanish investors, and an initial public offering. The process is expected to be completed in 1999.

BA confirms that it has a tentative agreement, and will present the proposal to its board at the next meeting on 13 November, but, until then, it is unwilling to discuss any details further. It is understood that the entire 10% shareholding would be valued at Ptas52-58 billion ($375-418 million), putting the entire value of the Spanish airline at up to Ptas580 billion.

American has committed to take a 10% stake in Argentinian airline Aerolineas Argentinas through its state parent Interinvest, and Iberia already holds a 10% stake in the flag carrier.

With the expected entry of Iberia and Aerolineas into oneworld, American's smaller stake in the Spanish airline would ensure that it and BA have similar strengths in the overall alliance.

Source: Flight International