November 13, 2009 10:51 a.m. EST
(CNN) -- British Airways and Iberia announced late Thursday that they have agreed the basis for a proposed merger between the two airlines which is expected to be completed in late 2010.
The boards of BA and the Spanish carrier were holding separate meetings for much of the day as speculation mounted that they were close to sealing an agreement to create Europe's third-biggest airline.
In a statement, BA said the proposed merger would create an airline group with 419 aircraft which would fly to 205 destinations.
