Iberia fuels talk of links with BA

SPECULATION that British Airways could move for rival Iberia is set to take off again after Angel Mullor, chief executive of the Spanish carrier, today conceded it was 'possible' BA will raise its 9% stake in the business.

Mullor added that the two airlines may also decide to take a shareholding in each other under plans for a far closer working relationship across Europe and the rest of the world.

BA has long signalled that Iberia would be its preferred target under any European consolidation and Mullor's comments are the clearest indication yet that a deal could be on the cards.

BA bolstered its war chest earlier this month by selling its 18.25% stake in Qantas for £425m. Iberia said in June that it intends to start joint accounts and share revenues with BA on routes between Spain and Britain from this winter.

Mullor said a second phase of integration would be a sharing-out of the market on routes between Europe, Latin America and Asia.

'The integration of the sales networks in Latin America and Europe are gradual integration processes, and after that it's possible that a percentage of shares changes hands at the end, but it's not immediate,' he said.

A tie-up between discount airline Virgin Express and Belgium's State carrier SN Brussels Airlines has moved closer. Virgin today said the companies' boards are to study new proposals for a deal put together by negotiators.