Spanish air carrier Iberia and British company British Air (BA) have ended 16 months of negotiations with an agreement to merge as equal partners, but the deal is far from done. The new company would be tax resident in Spain, but the head office would be in Britain. BA’s pension plan debt of £2.66 billion, exactly equal to the value of the company, must be brought under control or Iberia could still back out of the deal, according to the terms of the agreement. Iberia Friday morning 13 November posted a nine-month pre-tax and interest operating loss of €331 million, higher than analysts expected, for a net loss of €181m during the period. The new airline, which does not yet have a name (TopCo is being used temporarily), would be Europe’s third largest, after Lufthansa and Air France-KLM.

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