Iberia Airlines Approves British Airways Merger Appoints New Board


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Iberia Airlines Approves British Airways Merger Appoints New Board

By Bill Goldston

September 29, 2010 - Iberia Airlines appoints its chairman, Antonio Vazquez Romero as the new chairman of International Airlines Group (IAG), this new company formed under the merger agreement between Iberia and British Airways after Iberia’s board approved the merger last Wednesday.

When the deal is completed Iberia Airline investors will have a 44 percent stake in IAG and British Airways investors will 56 percent. Iberia Airlines is a flag carrier airline of Spain. Based in Madrid, it operates an international network of services from its main bases of Madrid-Barajas Airport and Barcelona El Prat Airport. Iberia Airlines is a part of Iberia Group which provides additional services.


In addition to transporting passengers and freight, Iberia Group carries out related activities, such as aircraft maintenance, handling in airports, IT systems and in-flight catering. Iberia Group airlines fly to over 102 destinations in 39 countries. Via code-sharing arrangements with other companies, it offers flights to another 90 destinations.

Willie Walsh, Managing Director IAG, announced in Mumbai that the newly merged group would look to acquire other airlines, particularly those in emerging markets. He also stated that a shortlist of 12 possible carriers that would potentially be included in the new group has been created. These airlines are widely expected to include LAN Chile, Cathay Pacific Airways, Qantas, Aer Lingus, Finnair, Kingfisher Airlines, American Airlines and Japan Airlines among others. 

IAG will be the third largest airline holding company in the world by revenue, with 419 aircraft transporting passengers between 200 destinations. The new company will carry over 62 million passengers per year, according to British Airways executives. Both airlines will, however, continue to operate under their current brand names. 

International Airlines Group will have its operational headquarters in London, which will control management of both its Spanish and British subsidiaries, with the board's meetings occurring in Madrid. IAG will be listed on the London Stock Exchange and a secondary listing in Madrid. It is expected to become an FTSE 100 constituent. IAG will be incorporated under Spanish law, receiving the "S.A." designation of a Spanish company versus the "Plc" of a British one. The newly formed company will pay taxes in Spain. The agreement is said to be worth over $8 billion and makes a three-way tie-in with AMR Corporation, which is the airline holding company owner of American Airlines.

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