BA, the flagship British Carrier, and Iberia, the Spanish airline, have agreed to a merger; 16 months after the two sides had announced that they were in merger talks.

The £4.6 billion merger between British Airways and Iberia, companies plan to generate €400m (£358m) a year by pooling their operations.

The combined group will be the world’s sixth-largest airline as measured by revenue (£13.4 billion a year) and Europe’s third biggest behind Lufthansa and Air France/ KLM. It will have 418 aircraft, serve 205 destinations and carry 62m passengers a year.

Despite the fact that British Airways shareholders will hold 55% of the enlarged British Airways/Iberia partnership, it has been revealed that the company will be resided in Spain for tax reasons and all shareholder and board meetings will be held in Spain. This is a blow for British Airways and the 188,000 small investors who hold shares in the company as they will have to pay for their own transport to attend future shareholder meetings.