BA in pension deal to clear way for Iberia merger

British Airways (BA) said it had agreed a recovery plan for its US$5.5 billion pension deficit, potentially removing a final obstacle to its planned merger with Spain's Iberia, Reuters reported.

BA and Iberia signed in April an $8 billion merger to create the world's third-biggest airline after months of negotiations during which the British airline's pension deficit had been one of the main stumbling blocks.

Iberia had reserved the right to back out of the deal – which will see BA shareholders take a majority 56 percent stake in the combined group – if the funding hole turned out to be too big.

"Iberia has three months to reach a decision on the pension recovery plan," BA said.

The two companies hope to complete the merger by December and a spokesman for Iberia told Reuters the pension agreement was "a positive step forward in this process".

The British airline, however, faces a third wave of industrial action, disrupting the peak holiday season, after the Unite union said it would ballot its cabin-crew members in its long-running dispute with BA.
(Source:www.cargonewsasia.com)