British Airways, Iberia Lineas in talks for $7-b merger plan

LONDON: British Airways and Iberia Lineas Aereas de Espana are holding board meetings to consider a $7-billion merger proposal, the UK carrier said. Iberia rose as much as 12% in Madrid trading and British Airways gained 8.2% after Sky News said last night that a combination would be confirmed today or tomorrow.

���No decisions have been taken and, at this time, there can be no guarantee that a transaction will be forthcoming,��� London-based British Airways said in a statement. ���A further announcement will be made in due course, if appropriate.���

British Airways chief executive officer Willie Walsh aims to create a global carrier to compete with Air France-KLM Group and Deutsche Lufthansa. A merger would meld BA���s network of US routes with Iberia���s Latin America services to consolidate the UK company���s leading position on trans-Atlantic services and its status as Europe���s No 3 airline. The two airlines said in July last year that they were in talks about an all-share merger.

���It���s been dragging along for so long it wouldn���t surprise me if we had reached a conclusion,��� said Stephen Furlong, an analyst at Davy Stockbrokers in Dublin with a ���neutral��� recommendation on both Iberia and British Airways.

Iberia rose 24 cents to e2.23 before trading up 9.8% at e2.18 as of 12:49 pm in the Spanish capital, giving a market value of e2.09 billion ($3.12 billion).

British Airways advanced 16.3 pence to 216.3 pence and was 7.4% higher at 214.7 pence, valuing the company at ��2.48 billion ($4.11 billion).