British Airways-Iberia planned merger to make Europe’s largest airlineJuly 30th, 2008 - 11:13 am ICT by IANS
London, July 30 (IANS) British Airways (BA) is in talks with Spanish carrier Iberia for a merger which will create Europe’s largest airline. With combined passenger numbers of more than 60 million a year, BA-Iberia would overtake Lufthansa, Air France-KLM and Ryanair to become Europe’s premier airline.
Willie Walsh, the chief executive of BA, said: “We are working together to create a new European airline that can compete with the best globally.” No details of the merger have been given but the brands will remain separate, The Times reports.
BA will retain its British focus and its strong transatlantic ties to the US, and Iberia will remain based in Madrid. However, there are likely to be some cuts to overlapping routes between Britain and Spain. BA may move some South American flights to Madrid and the number of direct flights to Spain could be cut.
By merging, the carriers would be able to gain economies of scale from bulk-buying fuel, aircraft and maintenance. There may also be job losses in the combined workforce of 64,000 if the two carriers cut flights between Britain and Spain.
Virgin Atlantic said it opposed the merger, as it would give BA even more control over landing slots in London’s Heathrow airport. It also claimed that BA’s fares might rise.
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