BA, Iberia nearing merger agreement

LONDON (Reuters) - British Airways (BAY.L) and Spanish airline Iberia (IBLA.MC) could announce a merger agreement as early as this week, Sky News reported on Wednesday citing unidentified sources.

The two airlines have resolved sticking points including who would run the combined company, the broadcaster reported. Iberia is scheduled to report nine-month earnings on Friday.

"Talks continue between British Airways and Iberia with a view to a merger," BA said in an emailed statement.

"No decisions have been taken and, at this time, there can be no guarantee that a transaction will be forthcoming. A further announcement will be made in due course, if appropriate."

The recession has hurt airlines as consumers cut back on trips abroad and lucrative business class travellers fly less. BA on November 6 predicted its revenue would slump by 1 billion pounds this year.

Iberia could not immediately be reached by Reuters for comment on its merger talks with BA.

(Reporting by Alex Lawler and Paul Day; editing by Carol Bishopric, Gary Hill)