British Airways and Spanish airline Iberia have approved proposals for a merger which would create a European aviation giant.
'The merger will create a strong European airline well able to compete in the 21st century,' BA chief executive Willie Walsh said. He added that both airlines would hold on to their brands and heritage but would achieve benefits as a combined force.
A joint statement from BA and Iberia said the new airline would have 419 aircraft and fly to 205 destinations, with the merger expected to be completed in late 2010.
BA will hold 55% of the new company, while Iberia will hold 45%. Mr Walsh will be chief executive of the new company while Iberia chairman Antonio Vazquez will be chairman.
The announcement comes after the two airlines held board meeting talks on a merger that would create a European aviation giant to rival Air France-KLM and Lufthansa.
Both airlines have suffered heavy losses because of plunging demand for air travel in the fierce global economic downturn. The pair announced in July 2008 that they were in talks for an all-share merger. But discussions have bogged down in differences over the balance of control and the size of BA's pension-fund deficit.
