British Airways And Iberia Merge

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The deal is estimated to be worth 7 billion dollars and the airlines hope to finish it before the end of next year.

Spanish Iberia and British British Airways has signed a preliminary agreement to merge, Airwise writes. The merger creates the world’s third largest airline in terms of yield.

British Airways is to extend their service between the U.S. and Europe with Iberia flights to South America. The transport network is further strengthened by a planned alliance with American Airlines.

BA’s shareholders get 55 percent of the new company. Iberia’s chairman Antonio Vazquez is also chairman of the new company and BA chief executive Willie Walsh is CEO.

The merger follows Air France KLM‘s pattern. A holding company will be created and will own the two airlines. In the first five years, airlines have separate licenses, codes and trademarks and opposite base in London and Madrid.