The Great Debate UK

BA-Iberia must fast-track reality flight


alex-smith– Alexander Smith is a Reuters columnist. The opinions expressed are his own –

Anglo-Spanish dealmaking has a chequered recent history — look no further than Ferrovial’s disastrous takeover of airports operator BAA. But this shouldn’t put British Airways and Iberia off fast tracking their planned tie-up to help stem losses.

Although Iberia is still making positive noises about the merger — despite giving a dire outlook for 2009 before predicting a return to profitability in 2010 — there have been dark mutterings in Madrid about any deal being postponed until September at the earliest.

Financial uncertainty, market volatility and a power struggle for control of Iberia’s biggest shareholder — Spanish savings bank Caja Madrid — are all cited as reasons for the apparent holding pattern.