**British Airways (BA) has said that it and Spanish airline Iberia are holding separate board meetings later to discuss some form of merger.**BA said in a statement that the meetings would consider a “potential transaction” between the two sides.
However, it added that no decisions had been taken and there could be no guarantee a deal would take place.
The firms have considered a tie-up for a number of years, holding talks on the issue in July 2008.
BA chief executive Willie Walsh has previously said that a merger would help both firms in the current economic climate.
Co-operation
In its statement, BA said that a further announcement would be made “in due course, if appropriate”.
Shares in BA were up 15.5 pence, or 7.75%, at 215.5p following its announcement, making it the biggest climber on the UK’s main share index, the FTSE 100.
BA already owns 13.5% of Iberia, and the two carriers have a code-sharing agreement under the One World grouping of airlines, which allows them to sell seats on each other’s services.
If a merger is announced, it would still require regulatory approval from the European Commission.
However, analysts say a deal is likely to be cleared, pointing to Air France’s successful merger with Dutch airline KLM in 2004.
BA’s announcement comes a week after it said it would cut a further 1,200 jobs, as it reported its first half-year loss.
It made a pre-tax loss of £292m in the six months to the end of September.
Iberia’s most recent results showed that it made a loss of 72.8m euros ($109m; £66m) between April and June.