Spain welcomes BA-Iberia merger

By Steve Kingstone
BBC News, Madrid

"Inevitable" was the editorial verdict from the left-leaning daily El Pais to the planned merger between Spain's Iberia and British Airways.

It argued that rising costs, falling passenger demand and the threat from budget airlines had forced traditional players to consolidate.

The newspaper said Iberia stood to benefit from a planned tie-up with a third company, American Airlines, and that Madrid's Barajas Airport might now expand father as a major international hub.

Most Spanish commentators view the deal as a marriage of equals.

Certainly, Iberia's 45% stake in the new company is higher than seemed likely when merger talks were first announced in July 2008.

The change reflects the steeper decline of British Airways during the economic downturn, a factor which has caused concern here.

Specifically, Iberia sought a cast-iron guarantee that its shareholders would bear no responsibility for BA's massive pensions deficit.

The main pilots' union has given the agreement a cautious welcome, with the caveat that the trumpeted parity between the two airlines must be "real".

Spanish cabin crew, who are currently involved in strike action, have demanded that "two plus two equals four" in terms of the merger's implications for staff.