/ / / / / / /

Merger of British Airways and Iberia Gets EU Greenlight

July 20, 2010 at 2:46 PM | by | Comments (0)

The thing about a wave of massive labor strikes that threaten to take down your entire company, is that they really free you up to brainstorm. What've you got to lose? So in addition to creating an entirely new fleet designed to circumvent unions, British Airways has been aggressively pursuing cost-cutting in a host of other ways.

One of those, the merger with Iberia that they formally inked at the end of last month after a year of teasing, just won EU approval. The result will be Europe's third-largest airline, a market share of about $7.5 billion, and—hopefully for them—an end to the money bleeding both have been experiencing. And, in a nice change, it might not be a total disaster for consumers.

As with any merger, the downside is that the airlines will be cutting redundant flights, which theoretically means higher ticket prices. On the other hand, BA isn't exactly known for its lean LCC-like efficiency, while Iberia usually comes up in booking conversations like "well OK, but maybe there's a reward seat open on Iberia that I can use as a connection... can you check that?" A little structural shaking up might be good across the board, with the new savings then getting passed on to consumers.

Even more importantly, the EU approved expanded cooperation between BA/Iberia and American Airlines. We've already expounded upon the glories of oneworld reward bookings, and we've also given you tips on how to make the most of your oneworld miles. The promise of expanded trans-Atlantic options, coupled with the near-certainty that restructuring will lower prices at least a little bit, makes this a potential win-win for airline and consumer.

Unless of course the combined airline uses the merger to decrease the value of miles. Or the US Department of Transportation nixes the deal. Or flights get cut but waste gets left in place. Or Virgin Atlantic's protests get heard and considered. In that case, oops.

[Photo: SkyNews]

Related Stories:
· EU clears BA-Iberia merger, alliance with American [Las Vegas Sun]
· Airline News [Jaunted]
· Airline Mergers [Jaunted]

Comments (0)

Post a Comment

Join the conversation!

Not a member? .