BA and Iberia Marketing Pact Okayed by EC

11 December 2003

The European Commission on Wednesday gave the green light to a marketing pact between two of the continent's largest airlines, British Airways and Spain's Iberia.

The blessed relationship is about as close as a loving couple can get short of outright marriage. The competition exemption granted by the EC permits the airlines to share profits and turnover in their joint venture, combine sales operations, plan networks and co-ordinate capacity and pricing. It will also unify management, sales and cargo handling.

As a quid pro quo, the duo will surrender takeoff and landing slots at London Gatwick airport and Madrid sufficient to allow a competitor four daily return services. In addition BA/Iberia have conceded slots at Gatwick for one daily return flight to each of Bilbao, Seville and Valencia.

According to Iberia chief executive Fernando Conte, the pact will make both airlines "more competitive in today's difficult environment," and deliver "benefits similar to those obtained through a merger, while preserving the separate identities of the two companies".

His opposite number at BA, Rod Eddington hailed the deal as "a sensible step forward in our efforts to progress consolidation in Europe".

And outside Europe? "If we had to choose a company for a bigger consolidation in the future, it would be Iberia," said Eddington.

Data sourced from: Financial Times; additional content by WARC staff