BA confident of Iberia deal

Walsh hints at bmi deal 

British Airways today (September 30) said there was a chance it could close a merger deal with Iberia by the end of the year.

BA's ceo Willie Walsh told reporters talks with the Spanish airline were progressing despite having gone on for so long.

Mr Walsh said the size of BA's pension deficit, a stumbling block to negotiations, was still a significant issue, the Financial Times reported.

But he said he believed the deficit would not prevent a merger despite concerns raised by Iberia.

Mr Walsh also confirmed his interest in making an offer for fellow British carrier bmi.

But there has been no indication that talks with bmi's current owner Lufthansa have started and BA has refused to comment further.

Speaking onboard BA's inaugural London City-New York JFK flight today, Mr Walsh told reporters it would possible to do both the Iberia and bmi deals.

Earlier this month BA dismissed reports that it was in talks with Lufthansa over ownership of bmi (see ABTN News BA "in talks to buy bmi").

At the time BA said it had "absolutely no comment to make whatsoever."

Bmi also dismissed the report as speculation while Lufthansa declined to comment.

The Sunday Times newspaper had reported that BA chairman Martin Broughton had flewn to Germany for talks with Lufthansa on a possible sale.

But again BA declined to comment on the report.

BA has reportedly been interested in acquiring bmi ever since founder Sir Michael Bishop signalled an intention to sell his majority stake.

Virgin has also in the past expressed its interest in bmi and its lucrative slots at London Heathrow Airport.

Bmi, which was struggling before its takeover by Lufthansa, holds 12% of the slots at Heathrow.

Mr Walsh has gone on record as saying that bmi's slots were too tempting to ignore.

Lufthansa paid Sir Michael a total of £223m to take over his control of bmi.

The German carrier, through a newly formed company LHBD now owns 80% plus one share of bmi. The rest is owned by SAS which has indicated its wish to sell.

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