British Airways possible bid for Iberia

British Airways chief executive Willie Walsh has confirmed that the airline is holding talks with Iberia’s major shareholder.

BA is not ruling out making an offer for the airline. Mr Walsh said it depends on the price but we have made it clear that we will only do something in agreement.

Mr Walsh said a BA management team is in Spain to hold discussions with the executives of investment bank Caja Madrid, which owns 23% of the airline.

BA wants to strengthen its relationship with Iberia, where it has just increased its own shareholding, by tapping into the Latin American market. The airline also wants to set up a joint business that would give BA access to South America.

The chief executive said discussions revolve around channelling passengers into Madrid and in return being allowed entry to South America.

Last week, BA confirmed it had purchased 3% of Iberia, Spain’s national carrier, taking its stake to 13.15%.

Currently, BA operates just 10 flights a week from Heathrow to South America, while in 2007, Iberia made £255 million net profit - primarily from its Latin American routes.

We have great confidence in the Iberia management. It is a very good airline. This acquisition reflects the strategic importance we attach to our relationship, concluded Mr Walsh.

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