British Airways to merge with Spanish giant Iberia
The long-awaited merger of British Airways and Spanish airline Iberia has been confirmed, creating a £4.4 billion business which will be one of the leading airlines in the world. This is a deal which has been ongoing for some time and one which has attracted significant criticism from various unions and consumer groups. So what does this mean for the future of British Airways?
As we have mentioned on numerous occasions, British Airways is in the midst of a massive cost cutting programme which has seen the company tackle the unions head-on as it attempts to cut costs to the bone. While both companies will maintain their national identities and brand names, they will in effect be owned by a holding company similar to the Air France and KLM deal. Interestingly the unions have given the deal a cautious welcome although there will obviously be many negotiations and discussions in the weeks and months ahead.
The deal was welcomed by the stock market with shares in both companies marked higher on hopes that it will secure the future of both single entities and also improve the outlook for the merged group looking forward. Virgin Airlines has already called on the competition authorities to review the deal although it is unlikely there will be any major difficulties in this region due to the state of the airline industry.
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