British Airways and Iberia will miss a deadline for signing a definitive merger agreement due to “technical issues.”

The two airlines had said in November that they expected to complete a deal by the end of the first quarter.

BA said: “We will not sign the merger agreement with Iberia in the first quarter of 2010. This is due to technical issues that need to be resolved and we anticipate that the agreement will be signed in due course.”

The British flag carrier declined to elaborate on the exact nature of the delay but denied it had anything to do with recent strike action or any issues relating to its £3.7 billion pension deficit.


Iberia said an agreement would be signed shortly and that technical issues would not derail the deal, which is set to create the world’s third largest airline.

Under the terms of the initial agreement late last year, Iberia can pull out of a deal if it thinks the benefits of the merger will be undermined by the recovery plan BA is negotiating with its pension trustees.

However, while BA struck a deal with trade unions in regards to its pension scheme last week, the formal plan will not be available to scrutinise until the end of June.