BA edges towards Iberia merger
British Airways aggress to reduce £3.7bn pension deficit
British Airways (BA) moved a step closer to securing a merger
with rival airline Iberia following its proposed reduction of the
The firm has pledged to pay off the £3.7 billion black hole in
its New Airways Pension Scheme and the Airways Pension Scheme by
Iberia hailed the move as a positive step towards the merger
which would form Europe's third biggest airline.
It said: "The next step will be Iberia's decision on the pension
Should the Spanish company approve of the plan, the airlines
would operate under the new name of International Airlines Group
and employ around 60,000 staff.
However, the timescale could be one possible obstacle to the
pension plan, as the UK pensions regulator wants all deficits
closed before 2026.
Keith Williams, BA's chief financial officer, said: "The
pensions regulator's initial response to the overall package has
been positive and we look forward to receiving their confirmation
that they have no objections."
BA also said another £20 million would be set aside for the
pension schemes in case the company collapsed.