BA to get in bed with Iberia Airways? It seems only a matter of time

May 26th, 2009 by admin | Filed under Daily News, Employment, Stocks and shares.

stocksandshares1 Iberia Lineas Aereas de Espana SA or Iberian Airlines as we know them are the Spanish airline who have been planning a merger with money losing British Airways Plc, have announced that the merger looks like being tied-up within a matter of months, according to a recent announcement by a company representative.

The remaining issue to be handled appears to be the U.K. carrier’s considerable pension deficit, which according to BA has widened to be around 1.5 billion pounds.
British Airways, currently Europe’s third largest carrier, recently announced its first full-year loss since 2002. As the global recession continues to bite, it seems that BA, in line with most people carriers, will have no option to put planes in mothballs in an effort to reduce overheads and will severely slash capacity as a result.

Iberia also announced this month that their first-quarter losses had also increased to around 86 million pounds (92.6 million Euros) with increased competition and the stuttering economy being the principal factors in reducing traffic.

With both the UK and US stock markets inactive on Monday, all eyes were on the other markets, where in the European exchanges stocks rose slightly with pharmaceuticals companies helping to offset earlier losses generally caused by the release of weaker than forecasted results from the German business sector.

The pan-European FTSE Eurofirst 300 rose 0.2 per cent to close on 857.71 points. The Eurofirst 300 has risen by almost a third since early March; however the rally has slowed down considerably this week driven by reports that government debt may be rising at a faster rate than anticipated.

The pound and the dollar were also static yesterday, while the Pound rose a few tenths of a decimal point against both the Yen and the Swiss Franc.
· Pound/US dollar 1.5935
· Pound/Euro 1.1370
· Pound/Japanese Yen 150.5884
· Pound/Swiss Franc 1.7274
On stateside, the Obama administration has come in for some stick. They face considerable pressure to put a hold on the Congress backed “Buy American” which to many smacks of protectionism. Fears that the bill, part of the $787bn US stimulus bill, which stipulates that companies who receive funding through the bill must use only US-manufactured raw materials and finished goods may have a negative effect on export sales.

News from the South Korean stock market has given cause for encouragement after it suffered a collapse following news of North Korea’s controversial nuclear test.
Initially shares in South Korea’s Kospi index fell by as much as 6%, before rebounding strongly to end less than three points lower.

Shock waves were little felt in the rest of the Far East, with Tokyo’s Nikkei index closing up 1.3% and Hong Kong’s Hang Seng closing up 0.35%.