London: The last major obstacle to the $8 billion (Dh29.38 billion) merger of BA and Iberia has been cleared after the Spanish airline approved a new funding plan for BA's multi-billion-pound pension deficit.
Iberia had the right to walk away from the deal to create the world's third largest airline if it didn't like the terms of the revamp that BA struck with trustees of the pension scheme in June.
The Spaniards made their decision following a board meeting in Madrid, and it was immediately welcomed by BA, which has been plagued by industrial unrest after the airline announced moves to cut jobs and reform working practices.
"Our merger plan is now very much on target," said a BA spokesman.
Regulators in Europe have already signed off the deal, which should be completed by the end of the year. Shareholder approval is expected in November.
Once finalised, BA investors will control 56 per cent of the combined company, to be called International Airlines Group (IAG). Iberia shareholders will hold 44 per cent. BA's chief executive Willie Walsh earlier this month disclosed that he has drawn up a shortlist of 12 airlines he would like to buy once the merger with Iberia has been completed. The list emerged following detailed conversations with Antonio Vazquez - his opposite number at Iberia to ensure that IAG is at the forefront of the next round of industry consolidation.
Takeover targets are understood to include Qantas, South African Airways, Finnair and at least one low-cost operator.
