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BA/Iberia merger not 100%

The proposed merger between Iberia and British Airways will depend on BA’s pension deficit. Iberia has the right to back out of the merger if the pension deficit is larger than expected.

Here are some major points if the merger goes through.

1). Better leverage to compete with Air France/KLM and Lufthansa.

2). Provide the best north-atlantic and south-atlantic network in the world. Giving BA better access to Latin America and Iberia access to North America and Asia.

3). Closer realtionship to American Airlines with prospects of a merger with AA.

4). Consolidate ASM’s and, thus, better control over capacity and pricing power.

 

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