15 Jul 2010

Green light for major European airline merger

4:03 pm on 15 July 2010

European regulators have cleared the merger between British Airways (BA) and Iberia, creating Europe's third largest airline.

The European Commission says it will give BA and Iberia immunity from anti-competitive laws that prevent businesses from co-ordinating prices and schedules, because the enlarged airline still faces competition, the BBC reports.

The commission also cleared the way for a three way tie up between BA, Iberia and American Airlines to operate lucrative trans-Atlantic routes, in return for giving up coveted London Heathrow airport slots.

The plan still needs US backing, and is bitterly opposed by rival Virgin Atlantic, which calls the deal a monster monopoly.