BA, Iberia merger gets nod from companies' shareholders
Published 30/11/2010 | 05:00
British Airways and Spanish carrier Iberia shareholders gave the go-ahead for a £5.8bn merger that will extend the UK company's dominance of lucrative transatlantic routes and close the gap to European market leaders Air France-KLM Group and Lufthansa.
Iberia's owners backed the plan in Madrid and three BA resolutions approving the deal won support from more than 99pc of voters in London. The UK carrier's cabin-crew union marked the occasion by announcing plans for a strike ballot in a 21-month dispute over pay and staffing levels.
BA chief Willie Walsh says he's planning further purchases in a push to cut costs and penetrate new markets.
The London-based carrier tapped a surge in demand for business flights to post its first profit in two years in the three months ended September 30 after Iberia returned to profit in the second quarter, and Walsh said fresh walkouts by flight attendants would not deflect from the recovery.
"The merger news means they can get on with details like co-ordinating flight schedules," said John Strickland, director of the JLS aviation consultancy. "The strike threat is another aggravation and it's hard to understand why this dispute hasn't been resolved. BA seems to have made some kind of a compromise."
Yesterday's votes pave the way for the carriers to combine under the International Consolidated Airlines Group SA holding company.
The transaction is scheduled take effect on January 21 after gaining UK High Court approval on Jan. 19, they said. (Bloomberg)