Aviation


 
(NIGERIA)    
'BA, Iberia Merger May Set Global Consolidation Scenario'
Apotential merger between Iberia Lineas Aereas de Espana SA and British Airways Plc could be key to facing tougher times ahead, Iberia Chairman, Fernando Conte said Wednesday. "We can say that the merger between British Airways and Iberia, if it takes place, will be one of the most important steps in the consolidation process of the European airline industry, and probably will set the scenario for a more global one", Conte said in a prepared speech at London's Aviation Club. Conte's remarks come after British Airways and Australia's Qantas Airways Limited, said they are in merger talks. Negotiations with Qantas come as BA continues merger talks with Iberia, which have slowed down over pension liabilities at the U.K.-based carrier.

The U.K. and Spanish carriers announced a GBP3.16 billion allshare merger in July, with tie-up terms still to be set. BA's pension plan has a deficit of about GBP1.7 billion. Iberia, in contrast, has no debt and about UER2 billion in cash. Conte noted that the Air France-KLM (3112.FR) merger, which took place five time was successful so far, as both companies have benefited from different cost and revenue synergies". Conte said consolidation could be the solution to a "toxic combination" resulting from economic slowdown and fuel price-driven inflation, which is hitting both the airlines and their customers.

Jeff Oguike.


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