Merger with Iberia sees new listing for British Airways

British Airways will embark on a new stockmarket journey today when it is listed as part of International Consolidated Airline Group following its merger with Spanish rival Iberia.

The former UK national carrier will be listed under its new name in markets in London and Madrid from 8am.

Thursday marked the end of nearly 24 years of trading under the British Airways name. The merger was completed on Friday.

Shares closed 5p lower at 282.5p on its last day as low-cost rival easyJet shook industry confidence with the announcement that soaring fuel costs were expected to double half-year losses.

BA, whose shares were suspended on Friday, also saw no respite in its industrial dispute with union Unite. Its cabin crew overwhelmingly voted in favour of more strikes in their bitter dispute with the firm.

The merger comes more than 20 years after British Airways joined the London stock market in a high-profile flotation which was 11 times oversubscribed.

BA and Iberia will retain their brands in the initiative, which is expected to save €400m a year by its fifth year.

The combined group will have 419 aircraft flying to 205 destinations and will be Europe’s second biggest airline by market value after Lufthansa.

BA will also benefit from Iberia’s strong presence in South America, where BA operates only a handful of routes.

The newly formed group plans to aggressively expand through further acquisitions and has drawn up a list of 12 companies it wants to buy.

Willie Walsh will step down as chief executive of BA to take up the same role at International Consolidated Airline Group. His basic pay will rise 12% from £735,000 (€864,00)) to £825,000 (€969,000) a year.

He is also in line for potential cash-and-shares annual bonuses of £1.65m (€1.9m) if he exceeds performance targets, capped at 200% of base salary.

Current BA chairman Martin Broughton will remain in his current post after the tie-up but will also become deputy chairman of the new group. He will be paid €350,000 and an extra €175,000 next year to help with the demands of integrating the two firms.