Investors give go-ahead to airlines' merger

The two firms, which announced merger plans in April and expect the deal to close in January, said that investors had backed the combination at separate meetings.

British Airways (BA) and Iberia hope their new company, International Airlines Group, will position the pair for further consolidation in the global airline sector as it emerges from a prolonged industry downturn.

The combination is expected to generate cost savings of 400 million euros after the fifth year.

In October, BA and Iberia revealed they were expecting further growth in 2011.

Last month, BA reported pre-tax profits of 158m – its first half-year surplus for two years.

The airline's profits haul for the six months ending September 30 was achieved despite disruption to flights caused by the ash cloud from an Icelandic volcano and strikes by cabin crew.

The figure was more than double the 73m that had been expected by analysts.

The last time the company had reported a half-year profit was in the six months ending September 2008, before the global financial crisis triggered by the collapse of Lehman Brothers. Iberia returned to a nine-month profit of 53 million euros ($73.6m) after two years of losses.

In October, Lufthansa and Air France-KLM also raised their earnings expectations.