BA and Iberia set to complete international business negotiations
Iberia board back BA's plan to reduce pension deficit
British Airways (BA) and Iberia could complete international business negotiations by the end of the year after the last obstacle to their merger was cleared.
The board of the Spanish airline has approved of BA's plan to close a large pension deficit of around £3.7 billion.
Iberia had the right to walk away from the proposed merger if it did not approve of the funding plan, but the tie-up is now likely to be completed before 2011.
"Our merger plan is now very much on target," said a BA spokesman.
The deal would create the world's third-largest airline and would help the two struggling firms expand their operations.
BA's chief executive Willie Walsh recently drew up a list of 12 potential takeover targets the UK airline is likely to move for once the deal with Iberia is completed.
Qantas, South African Airways, Finnair and a budget carrier are among those rumoured to be on the list.