Earlier today British Airways and Spain’s Iberia signed a merger deal, creating one of the world’s largest airline companies. The merger was provisionally agreed upon in November 2009, but the actual proposal has been on the table ever since 1999, when Spain’s national airline was privatized. With the new merger – scheduled to go into effect by December 2010 (once shareholders and regulators have approved the deal) – the new group will operate a fleet of 419 aircraft and service more than 200 destinations worldwide.

Although the new company (whose headquarters will be in London) will go by the name International Airlines Group, the British Airways and Iberia brands will continue to operate as they always have. Aside from a larger combined network, the only (welcome) change for customers could be cheaper flights; a result of the estimated annual 400 million Euros (CDN$533 million) in costs that the airlines will save.

If all goes accordingly, there are even plans to add another airline to the group: this time a transatlantic partner such as American Airlines. News of the BA-Iberia merger came hot on the heels of April 7 reports that two U.S. airlines – United and US Airways – are also seriously negotiating a possible merger, which could be finalized in the next two weeks.

If it goes ahead, the new American group will also join the pantheon of the world’s largest airline companies. Currently, the title of world’s biggest airline is held by Delta, which earned the honor when it acquired Northwest Airlines in 2008. In 2009, Delta transported over 161 million passengers.