UPDATE 1-BA, Iberia say on track for merger deal in Q1

* On track to sign merger in Q1 but no fixed date

* Pension deficit still main stumbling block

* BA shares up 1.6 pct, Iberia up 1.3 pct

(Recasts with company comments)

MADRID, Feb 3 (BestGrowthStock) – British Airways (BAY.L: ) and Iberia
(IBLA.MC: ) are on track to sign their merger agreement to create
the world’s third largest airline by revenue in the first
quarter of 2010, the two carriers said on Wednesday.

However, there is no fixed date for the deal to be signed, a
source with knowledge of the merger negotiations said.

Earlier, Spanish business newspaper Cinco Dias said the
Spanish airline had slated Feb. 12 and Feb. 25 as possible dates
to sign with BA, following the memorandum of understanding
agreed in November.

“We aim to sign the merger agreement in the first quarter of
2010,” a BA spokesman said on Wednesday.

The two airlines will still need to reach an agreement on
how to address BA’s multi-billion pound pension fund deficit
before their long-planned merger finally becomes a reality.

Shares in both BA and Iberia have gained momentum recently
on hopes the merger will go ahead. By 1030 GMT, BA’s share price
was up 1.6 percent at 221 pence, while Iberia was 1.3 percent
higher at 2.36 euros.

The British airline is due to announce results for its third
quarter to end-December on Friday, with analysts expecting an
operating loss of between 90 and 100 million pounds. Iberia
reports its full-year results on Feb. 24.

Stock Trading

(Reporting by Tracy Rucinski; Editing by Greg Mahlich)

UPDATE 1-BA, Iberia say on track for merger deal in Q1