IAG is unlikely to get European Union competition approval for its plan to acquire Aer Lingus without concessions, two people familiar with the matter have said.
IAG, which owns British Airways and Iberia, met with European Commission officials on Wednesday in a so-called state of play meeting.
The EU executive typically holds such meetings only if it is concerned mergers may reduce competition.
"It is not particularly likely that IAG will get approval without concessions," one of the sources said.
The second source said IAG was considering whether to offer concessions.
Earlier IAG formally announced its offer for Aer Lingus, which values the airline at €1.4 billion.
The formal offer is being sent out to shareholders in the Irish airline today.
International Consolidated Airlines Group said that Aer Lingus shareholders will receive €2.55 in cash for each Aer Lingus Share.
This comprises a cash payment of €2.50 per Aer Lingus share and a cash dividend of five cent per share.
The airline said the offer will initially remain open for acceptance until 5pm on July 16.
The offer document promises to keep the airline's brand and head office in Ireland, boost connectivity and keep the Heathrow landing slots for seven years.
Meanwhile, Aer Lingus has said it will hold an EGM on July 16 in Dublin to allow shareholders to seek approval of what are known as the connectivity resolutions agreed between IAG and the Government.
The resolutions deal with issues such as the length of time Aer Lingus would, under IAG ownership, commit to retaining its current schedule between Dublin Airport and Heathrow.
The Government, which has a 25% stake in Aer Lingus, said last month that it would support IAG's bid for the former national carrier.
Minister for Transport Paschal Donohoe said the Government would receive €335m for its stake in Aer Lingus but will retain one share in the airline.
Ryanair, which has a near-30% stake in the airline, had said it would decide on its next move when the formal offer for Aer Lingus was made by IAG.
It was recently ordered by the UK's Competition and Markets Authority to sell down its stake in Aer Lingus to no more than 5% but said it would appeal the ruling.
Analysis: from Conor Brophy
What's in the offer?
Today's formal offer from IAG for Aer Lingus fills in some of the blanks for us. It tells us that shareholders have until 16 July to accept, while it also sets out all the conditions which have to be met before the deal is done and becomes unconditional.
Much of this has already been made public including the fact that Aer Lingus shareholders would need to approve "connectivity resolutions" at an extraordinary general meeting. These are the terms agreed with the Government which give force to IAG's proposals to maintain services on routes between Cork, Shannon, Dublin and Heathrow airports and which guarantee that Aer Lingus will retain its own name and keep its headquarters in Ireland.
What about Ryanair?
Ryanair has steadfastly refused to date to give any indication as to whether it would sell to IAG or not until it had received and considered this offer document. The airline has made no comment on the offer document as yet.
But an important subplot here is that the competition authorities in the UK have made a determination that Ryanair must sell down the bulk of its 29.8% shareholding. Ryanair has indicated it will appeal but this IAG bid, on the surface, offers Ryanair a very easy out.
