BA said it expected the merger to be completed by the end of this year in a move that will create one of the world's largest airline groups, with 408 aircraft carrying more than 58 million passengers a year.

The tie-up will create a new holding company called International Airlines Group, but the airlines will retain their current operations and continue to use their individual brands.

Today's merger agreement follows the memorandum of understanding signed between the two airlines in November.

British Airways chief executive Willie Walsh said the merged company will provide customers with a larger combined network.

'It will also have greater potential for further growth by optimising the dual hubs of London and Madrid and providing continued investment in new products and services,' he added.

The merger is subject to regulatory approval from competition authorities including the European Commission, and to approval by both British Airways and Iberia shareholders.

Iberia will also be entitled to terminate the merger agreement if the pension recovery plan agreed between BA and its pension trustees is found to be 'materially detrimental' to the merger.

BA has a comparatively thin presence in central and South America, flying only to Mexico City, Rio de Janeiro and Sao Paulo in Brazil and Buenos Aires in Argentina. Iberia, on the other hand, operates numerous flights to this region so a merger allows passengers more access to South American cities.

Similarly, Iberian passengers will benefit from direct flights to areas where BA has more flights than the Spanish carrier.

BA and Iberia are also working on a transatlantic joint venture with US carrier American Airlines.

BA believes the three-way agreement will benefit consumers by improving connections and flight schedules.Rival airlines have expressed opposition to the agreement, with Ryanair recently likening the merger to 'two drunks trying to prop each other up'.

Virgin Atlantic said the deal would increase BA's dominance at Heathrow Airport.

The merger is expected to produce annual savings of around €400m by the end of the fifth year after the merger's completion.

The announcement appears to have dashed any hopes of a last-minute deal to avert the strike and another four-day stoppage from March 27. BA said it remained available for "meaningful" discussions, but even though behind the scenes contacts have been maintained, there were no signs tonight of any fresh talks.


source: Hampshire Chronicle

The charges will affect those seeking to ensure they sit together on a flight and people with a preference for window, aisle or emergency exit seats.

Prices range from £10 per person for European economy flights, to £60 for long haul trips in business class.

Consumer group Which? said it was “disappointing to see British Airways jumping on the bandwagon”.

BA said it would “give customers more control over their seating options”. The new charges will come into force on 7 October.

The airline currently allows passengers to reserve seats in the 24 hours prior to departure.

The new charge – aimed at passengers wanting to reserve seats earlier than this – will be £20 on long-haul economy or short flights in business class, while a seat in an emergency exit row will cost £50.

This can be booked between 10 and four days before take-off.

A BA spokeswoman said: “Customers frequently request specific seats, but in the past we’ve only been able to confirm them 24 hours in advance or on the day. We know people want to secure them in advance and have real control over their flying experience. This will allow them to do that.”

Rochelle Turner, head of research at Which? Holiday, said travellers had become used to budget airlines charging them for a service that used to be included in the “headline price”.

“We know from our members that people really don’t like these extra charges – they’d much rather see a headline price that includes everything,” she said. “BA is still giving some people the chance to reserve their seat for free in the 24 hours before departure, but if you aren’t quick enough off the mark, you could find yourself sitting on the other side of the plane from your family or partner.

“It’s no way to start a holiday.”

The move comes as the airline attempts to bolster its balance sheet after a £401m loss in the last financial year.

And it follows BA’s decision to cut luggage allowances and abolish free meals on short flights.

source: aviationnews.eu