British Airways (BA) customers will have access to up to 59 new destinations following the planned merger with Iberia next year.
The merger opens up a number of new routes for BA to Africa as well as 13 new destinations in Latin America. Meanwhile, customers of Iberia will gain 98 new destinations through the BA network, most of which are in the US or the east.
Following the merger, which will see the creation of a new holding company TopCo, the new airline group will have 419 aircraft flying to 205 destinations. It will be the world’s third biggest airline.
It is also expected to lead to better flight frequencies and connections, more competitive prices, access to more VIP lounges and enhanced frequent flyer benefits.
The merger will also lead to continued investment in both customer products and services, while there is also greater potential for further growth around the two airlines’ hubs in Heathrow and Madrid airports.
The merger is also expected to result in £356 million in synergy savings over a period of five years.
Iberia chairman and chief executive Antonio Vazquez said: “This agreement is a giant step in the history of Iberia and British Airways.
“We are laying the foundations of what will be one of the most important airlines in the world, a real global airline. I believe that, thanks to this transaction, which is the most important in the European airline industry in recent years, we are more prepared than ever to face future challenges.”
The merger is expected to be completed by late 2010, providing the deal is cleared by the European Commission.
BA will hold a 55% stake in the new airline group while Iberia will hold 45%. Vazquez will be chairman of the new company and Willie Walsh will be chief executive. TopCo’s headquarters will be in London, even though the company will be registered in Madrid.
In 2008, BA and Iberia carried 62 million passengers between them with a joint revenue of approximately £13.4 billion.