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| Version 12 | Version 13 |
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| BA and Iberia agree merger deal | BA and Iberia agree merger deal |
| (about 14 hours later) | |
| British Airways and Spanish airline Iberia say they have reached a preliminary agreement for a merger expected to be completed in late 2010. | British Airways and Spanish airline Iberia say they have reached a preliminary agreement for a merger expected to be completed in late 2010. |
| The merger, which must be approved by the European Commission, would create the world's third biggest airline. | The merger, which must be approved by the European Commission, would create the world's third biggest airline. |
| Under its terms, Iberia would take a 45% stake and BA, which last week reported a six-month pre-tax loss of £292m, a 55% stake in the company. | Under its terms, Iberia would take a 45% stake and BA, which last week reported a six-month pre-tax loss of £292m, a 55% stake in the company. |
| Iberia says it can pull out if BA fails to resolve its pension deficit problem. | Iberia says it can pull out if BA fails to resolve its pension deficit problem. |
| 'Growing dominance' | 'Growing dominance' |
| "The merger will create a strong European airline well able to compete in the 21st Century," said BA chief executive Willie Walsh. | "The merger will create a strong European airline well able to compete in the 21st Century," said BA chief executive Willie Walsh. |
| "Both airlines will retain their brands and heritage while achieving significant synergies as a combined force." | "Both airlines will retain their brands and heritage while achieving significant synergies as a combined force." |
| The two airlines had been discussing the deal at separate board meetings. | The two airlines had been discussing the deal at separate board meetings. |
| It would create an airline with 419 aircraft flying to 205 separate destinations, and would save the two partners 400m euros ($594m; £358m) in costs a year, they said. | It would create an airline with 419 aircraft flying to 205 separate destinations, and would save the two partners 400m euros ($594m; £358m) in costs a year, they said. |
| Iberia's chairman Antonio Vazquez would take the same role at the new company, while Mr Walsh would become its chief executive. | Iberia's chairman Antonio Vazquez would take the same role at the new company, while Mr Walsh would become its chief executive. |
| News of the deal did not go down well with Virgin Atlantic, one of BA's big competitors in the UK, which raised concerns about the new company's market share. | News of the deal did not go down well with Virgin Atlantic, one of BA's big competitors in the UK, which raised concerns about the new company's market share. |
| "The merger will increase BA's dominance at Heathrow with 44% of take-off and landing slots this winter. It is impossible for any other airline to replicate their scale," the airline said. | "The merger will increase BA's dominance at Heathrow with 44% of take-off and landing slots this winter. It is impossible for any other airline to replicate their scale," the airline said. |
| Big losses | Big losses |
| Both BA and Iberia have been losing money during the downturn as businesses and individuals cut back on flying. | Both BA and Iberia have been losing money during the downturn as businesses and individuals cut back on flying. |
| Mr Walsh has previously said a merger would help both firms cope with the recession. | Mr Walsh has previously said a merger would help both firms cope with the recession. |
| Iberia staff are due to strike over pay in the run-up to Christmas | Iberia staff are due to strike over pay in the run-up to Christmas |
| The firms have considered a tie-up for a number of years and held talks on the issue in July 2008. | The firms have considered a tie-up for a number of years and held talks on the issue in July 2008. |
| BA already owns 13.5% of Iberia and the two carriers have a code-sharing agreement under the One World grouping of airlines, which allows them to sell seats on each other's services. | BA already owns 13.5% of Iberia and the two carriers have a code-sharing agreement under the One World grouping of airlines, which allows them to sell seats on each other's services. |
| If a merger is formalised, it would still require regulatory approval from the European Commission. | If a merger is formalised, it would still require regulatory approval from the European Commission. |
| However, analysts say a deal is likely to be cleared, pointing to Air France's successful merger with Dutch airline KLM in 2004. | However, analysts say a deal is likely to be cleared, pointing to Air France's successful merger with Dutch airline KLM in 2004. |
| The agreement comes a week after BA said it would cut a further 1,200 jobs, as it reported a first-half loss for the first time. | The agreement comes a week after BA said it would cut a further 1,200 jobs, as it reported a first-half loss for the first time. |
| HAVE YOUR SAYWe are in a recession and the member states of the EU must pull together for the good of allJames, East Lothian Send us your comments | HAVE YOUR SAYWe are in a recession and the member states of the EU must pull together for the good of allJames, East Lothian Send us your comments |
| It made a pre-tax loss of £292m in the six months to the end of September. | It made a pre-tax loss of £292m in the six months to the end of September. |
| The half-year results also revealed a growing problem with its two final-salary pension schemes. | The half-year results also revealed a growing problem with its two final-salary pension schemes. |
| In the past six months, the surplus in one scheme fell from £860m to £27m, while the deficit in the other scheme ballooned from £1.2bn to £2.7bn. | In the past six months, the surplus in one scheme fell from £860m to £27m, while the deficit in the other scheme ballooned from £1.2bn to £2.7bn. |
| Iberia's most recent results showed that it made a loss of 72.8m euros between April and June. | Iberia's most recent results showed that it made a loss of 72.8m euros between April and June. |
| Both airlines are also negotiating with staff over strike action. | Both airlines are also negotiating with staff over strike action. |
| BA cabin crew are being balloted on whether to take action over the company's cost-cutting plans, while Iberia staff have already gone on strike over pay, and plan more disruptions in the run-up to Christmas. | BA cabin crew are being balloted on whether to take action over the company's cost-cutting plans, while Iberia staff have already gone on strike over pay, and plan more disruptions in the run-up to Christmas. |