European regulators have cleared the merger between British Airways (BA) and Iberia, creating Europe's third largest airline.
The European Commission says it will give BA and Iberia immunity from anti-competitive laws that prevent businesses from co-ordinating prices and schedules, because the enlarged airline still faces competition, the BBC reports.
The commission also cleared the way for a three way tie up between BA, Iberia and American Airlines to operate lucrative trans-Atlantic routes, in return for giving up coveted London Heathrow airport slots.
The plan still needs US backing, and is bitterly opposed by rival Virgin Atlantic, which calls the deal a monster monopoly.
