British Airways has announced their intention to merge with OneWorld alliance partner Iberia in an all-stock swap. This isn’t the first time that merger rumors have come up between this pair, but it looks like it might actually have legs this time. Last time they were discussing merger possibilities, back in November ‘07, BA walked away after Iberia saw some significant local investment within Spain drive the price up.
The route maps are rather complimentary across the two, which is good, and they can certainly save a lot of money by reducing overlap in their administrative functions and in some of their fleet maintenance facilities.
It remains to be seen whether this merger will involve the Iberia brand being subsumed into the BA brand or if they will continue to operate both brands, similar to the KLM/Air France arrangement. Unless they plan a serious overhaul of the service and amenities it would probably make sense to keep Iberia apart from BA to ensure that the BA brand keeps what cache it has.
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