BA shareholders back Iberia merger
Published 29/11/2010 | 11:52
British Airways' shareholders have approved a £5 billion merger between the airline and Spanish carrier Iberia.
With Iberia shareholders, meeting in Madrid on Monday, also expected to give the link-up the go-ahead, a giant combined airline will be created.
The cold weather and the Tube strike meant only around 30 BA shareholders were in attendance when BA chairman Martin Broughton opened the shareholders' meeting in Westminster.
He told shareholders that the merger had a "compelling, strategic and financial logic" and would benefit staff, passengers and shareholders, while BA chief executive Willie Walsh said the merger would ensure BA could compete effectively with low-cost carriers.
The merger will result in the creation of a new parent company for the two carriers - International Airlines Group (IAG). However, both airlines will keep their individual identities when IAG shares begin trading on the London Stock Market, with the link-up expected to be completed around January 21.
The merger means a change of role for Mr Walsh who has been battling all year to not only see the link-up completed but also to end the cabin crew dispute which has led to strikes. Mr Walsh will become the IAG chief executive, with BA's chief financial officer, Keith Williams, becoming the new BA chief executive.
Mr Williams's current BA position will be taken by Nick Swift, who is currently finance boss at transport company Go-Ahead.
The merged airline will have 408 aircraft carrying around 57 million passengers a year. Between them, the two carriers have more than 57,000 staff and fly to more than 250 destinations.
Although the cabin crew dispute is, as yet, unresolved, BA and Iberia have overcome what was seen as possible hindrance to the merger - the large BA pension deficit. There were fears that Iberia would be put off by this problem but the Spanish airline said it is happy with the steps BA is taking to reduce the deficit.