Tie-up between BA and Iberia to face the vote

INVESTORS in British Airways and Spain’s Iberia are due to vote today on a £5.6bn merger to create a new giant of the skies.

Shareholders are due to vote in London and Madrid on whether to approve the tie-up to create a holding company known as International Airlines Group (IAG).

It would mark another step in consolidation that has led to ties between Air France and KLM and Lufthansa, Swiss and Austrian Airlines.

Traditional flag carriers are teaming up to cut costs in the face of the economic downturn and competition from budget airlines.

In IAG, BA and Iberia would each keep their identities and operations, but would have access to each other’s networks, including Iberia’s Latin and South American routes.

BA chief executive Willie Walsh would become chief executive of the new group and Iberia chairman Antonio Vazquez would be chairman.