from today's Times

BA chief says Iberia is perfect partner
By Russell Hotten



ROD EDDINGTON, chief executive of British Airways (BA), today names Iberia as a likely merger partner, adding that BA’s future in Europe would be tied to the Spanish flag carrier.
In his clearest statement yet about consolidation among European airlines, Mr Eddington called Iberia a “natural partner” and “pivotal” to BA’s plans. “There are a number of scenarios: keeping the brands separate but having common back office functions; or maybe integrating the businesses in their entirety,” he says in an interview with The Times.

BA owns 9.9 per cent of Iberia, and the two airlines have asked regulators in Brussels for clearance to run joint services from London to Barcelona and Madrid.

However, Mr Eddington sees the links going much further. “I think that if we can drive a much stronger relationship it will be the bedrock of whatever else we decide to do in Europe,” he said.

“I do not know where BA-Iberia will end up, but I know it has to start with close commercial links and that’s what I’m looking to build right now.”

Mr Eddington has never before been so open about his plans for an alliance with a rival. He heaped praise on Iberia’s executive team, saying the airline was now one of the best run and financially strong airlines in the world.

The two airlines would make a good fit, as their networks are complementary. BA has a strong service across the Atlantic, whereas Iberia operates mainly to South America.

This week the European Court of Justice helped to pave the way for European aviation consolidation. The court ruled that Brussels, not member states, should have responsibility to negotiate flying rights deals with America, effectively reducing countries’ control over their flag carriers.