BA and Iberia to retain separate brands after merger

British Airways and Iberia have agreed to merge in a deal that will create the world’s third biggest airline.

British Airways

The two have reached an agreement in principle to merge with BA taking a 55% stake and Iberia a 45% slice.

The two airlines will retain their separate brands when the deal completes, which is expected to be late next year.

Willie Walsh, chief executive of BA, says the deal, which will require regulatory approval, “will create a strong European airline well able to compete in the 21st Century”.

The two already work together under the One World airline alliance, which allows them to sell seats on each other’s planes and held talks on a tie-up last year, while BA owns 13.5% of the Spanish carrier.

The proposed merger will create a new holding company called TopCo that will own both the existing airlines and whose shareholders will be the current BA and Iberia shareholders. Under the terms of the proposed merger, BA shareholders will receive one new ordinary share in TopCo for every existing BA ordinary share held by them and Iberia shareholders will receive 1.0205 new ordinary shares for every existing Iberia ordinary share held by them.

In a statement, the two airlines say the deal will save €400m (£357m) in costs per year.

The aviation industry has been hit hard by the global recession with the International Air Transport Association (IATA) predicting that the industry will lose $11 billion this year.

BA recently reported a £292m loss for the six months to 30 September and announced it is to cut a further 1,200 jobs, while Iberia announced it swung to a loss of €182m (£162.5m) in the nine months to 30 September, compared with a profit of €51.1m (£45.6m) a year ago

Walsh will be chief executive of the enlarged group while Iberia’s Antonio Vazquez Romero will be chairman.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here