BA-Iberia hit turbulence as merger takes off

A multi-billion-pound merger between British Airways and Iberia of Spain, creating Europe’s second biggest airline, was completed yesterday, but immediately hit turbulence as BA staff voted to strike.

“The merger has now become effective,” BA and Iberia in a statement said as shares in the new company, International Airline Group (IAG), prepare to trade for the first time on Monday.

British union Unite later said that BA cabin crew had voted in favour of fresh strikes in a long-running dispute with the airline over pay and other perks, although it did not mention any dates.

The vote was part of a dispute that prompted 22 days of strike action last year. “For the fourth time in 13 months, British Airways cabin crew have voted overwhelmingly in support of their union and expressed their dissatisfaction with management behaviour,” said Unite general secretary-designate Len McCluskey.

BA hit back, insisting in a statement that “Unite does not have the support of the majority of our cabin crew.”

Under the terms of the merger, BA and Iberia are retaining their current operations and individual brands, while British Airways boss Willie Walsh is chief executive of the new group.

Shareholders of both airlines voted in November to the merger which values the pair at a combined £6.02 billion

British Airways holds 55 per cent of IAG, while Iberia has the remaining 45 per cent. A merger allows the two carriers to catch up with rivals such as Air France-KLM and Lufthansa, according to analysts.

“In terms of size, BA-Iberia will be the second biggest carrier in Europe and amongst the top ten in the world,” said Saj Ahmad, an analyst at consultants FBE Aero-space.

“This should deliver many operational economies of scale as the businesses integrate over time and allows BA/Iberia to offer a wider global network for their customers,” he said yesterday.