It has been reported that the British Airways and Iberia are on the course for merger. The aviation majors have signed a definitive merger agreement and now both firms will act together to resolves several operational issues.

They have unanimously decided to take steps to reposition themselves in the global airline industry by creating a fresh force. It has been informed that the deal is still under process and soon to be officially confirmed.

Both of the companies have announced their tie up plans earlier and the details of the merger agreement soon to be out. The name of the new holding company being set up for the merged body will be International Airlines Group.

And it will be headquartered in London although registered in Madrid. BA's current chief, Willie Walsh will be the chief executive of the newly formed company.

So far as share holders are concerned, it is yet to be decided. BA shareholders may receive 55% of the new company and Iberia shareholders 45%. Or else it may be a 56%-44% deal between the both.