IBERIA has approved British Airways’ (BA) plan to tackle its £3.7bn pension deficit, removing the last remaining hurdle to their merger plans.
The decision was made by Iberia’s board, which met yesterday to decide whether it should approve the proposals set out by BA chief executive Willie Walsh.
Iberia’s decision means the merger plans, which have already received EU clearance, will gather pace.
Under the merger agreement, Iberia had the right to back out of the $8bn (£5bn) tie-up if it didn’t like BA’s proposals for plugging the black hole in its pension fund.
A statement from Iberia said: “This decision represents another step forward in the merger process.”
The final approval will be left in the hands of both sets of shareholders, who will vote on the tie-up in November.
BA shareholders will own 56 per cent of the newly merged company, which will be called International Airlines Group. The remaining 44 per cent will be held by Iberia shareholders.
In June, BA detailed its pension recovery plan, which commits to annual contributions of £330m, with a three per cent rise every year.