British Airways and Spanish airline Iberia have signed a merger agreement to create one of the world's largest airline companies.
The merger was provisionally agreed in November last year and is expected to be completed by the end of this year.
The deal is expected to save the airlines 400 million euros per year.
The new company will be called International Airlines Group, but the BA and Iberia brands will continue to operate as normal.
The company will have its headquarters in London, with BA shareholders retaining 55% ownership of the company.
In total, the group will operate 419 aircraft, flying to more than 200 destinations, and carry a total of 62 million passengers per year.
The BBC reports the two airlines have few overlapping routes. Both expect to post huge losses this year.
