BA and Iberia brands to remain as airlines confirm merger

LONDON - British Airways (BA) and Iberia have formally signed a deal, provisionally agreed in November, to merge and create one of the world's biggest airlines.

British Airways: confirms Iberia merger
British Airways: confirms Iberia merger

The new company will be called International Airlines Group but the BA and Iberia brands will continue to operate as normal.

The merger is expected to achieve savings of £350m a year. Both airlines have suffered because of the recession and BA, which is beset by strike action that is costing it up to £50m a day, is expected to post its heaviest loss since privatisation.

BA and Iberia are considered a natural fit because they have few over-lapping routes. They will also be able to compete more effectively against European giants Lufthansa and Air France-KLM.

According to BA, the new group will operate 419 aircraft, flying to more than 200 destinations, and carry a total of 62 million passengers a year.

The merger is expected to be completed by December, subject to approval from shareholders and regulators.

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