British Airways and Spanish carrier Iberia have reached a preliminary agreement on a merger.In a joint statement, the two companies have agreed a deal which will see BA hold 55 per cent of the new company, with Iberia taking 45 per cent. The loss-making airlines announced in 2008 that they were in merger talks, but progress has been hampered by differences over the balance of control between the two. The tie up will take some time to finalise. Howard Wheelden is an Aviation analyst: “It’s only the first stage. That means that both airlines have agreed a strategy to move forward, then there is the regulatory process, that could belong and complicated. Of course the shareholders must be onboard as well as the staff.” The union will create Europe’s third largest aviation group, bringing together BA’s extensive US network and Iberia’s comprehensive Latin-American service. Both companies are in difficulty, with BA announcing more job cuts only last week. While the planes in Spain have been grounded recently as a result of strike action.