Yesterday shareholders for both British Airways and Iberia voted for the proposed merger between the airlines to go ahead. The new holding company, International Airlines Group (IAG), is due to begin operations on the 21st Jan 2011
International Airlines Group will retain the two individual brands, which will continue to operate as normal under IAG, however in the new year BA shares will no longer be listed on the London stock exchange.
British Airways Chief Executive Willie Walsh, said: "We’ve had a strong relationship with Iberia for more than a decade and this merger will enhance both airlines’ strategic and financial positions, creating benefits for our customers, shareholders and staff. The merger will create a new holding company International Airlines Group that will be ideally placed to lead future consolidation within the aviation industry... British Airways and Iberia will retain their individual brands and airline operations. The merged company will benefit from the two airlines’ complementary networks with our strong presence in North America, Asia and Africa and Iberia’s strong presence in Latin America and our combined presence in Europe."
The merger was agreed back in April and will create the second largest airline in Europe, after Air France-KLM , with around 408 aircraft, 57,000 staff and carrying in the region of 57 million passengers a year.
One of the major benefits of the merger is the list of new destinations available to the new sister brands. Previously BA only flew to three airports in South America (Rio de Janerio, Sao Paulo & Buenos Aires), whereas Iberia fly to 11 destinations offering eight new points of entry and giving BA and much bigger presence in the region. Iberia will also be adding new destinations for their passengers thanks to BA's extensive North America program.
BA chief executive Willie Walsh believes that the merger will also ensure the BA can compete with low-cost carriers. With the airline market between Britain and Spain among the most competitive in the world IAG will be in a position to expand its operations and offer better connections and choice of departures between the countries.
In a another week of strike speculation this will be a welcome boost to BA, their staff and their customers.
Written by Stephen Adam