The race for consolidation in the airline industry intensified yesterday as British Airways said it had approached a number of private-equity groups about a possible bid for Iberia, the Spanish flag-carrier.

British Airways, which holds 10 per cent of Iberia's shares and has first refusal over an additional 32 per cent, has ruled out making a solo bid for Iberia.

Instead, it is looking to form a consortium that could include one or more partners from Spain.

The airline said it had not made a decision about the future of its 10 per cent stake and was examining numerous options, including full disposal.

Iberia has already attracted interest from private-equity groups. Last month, US buyout firm Texas Pacific Group (TPG) made a $3.41 billion (€2.51 billion) non-binding offer to acquire it.

Iberia said its board had requested information from TPG about which Spanish investors would take part in any bid, as it was concerned that an eventual takeover should maintain the Spanish nationality of the group to protect its international traffic rights.

It also requested information from TPG about the identity of an industrial partner in its consortium.

Apax Partners is also thought to be interested in the Spanish airline. BA is the third-biggest European airline after Air France-KLM and Lufthansa.

Consolidation among European airlines has been precipitated by the open-skies agreement struck between the EU and the US this month, which eliminates many restrictions on flights between the two regions. The agreement starts in 2008.

Iberia's share price has doubled in the last six months because of the deal to liberalise transatlantic air markets and because a $9 billion private-equity takeover of Australia's Qantas helped fuel expectations of wider industry consolidation.

The shares have also been bolstered by TPG's approach and reports that Apax was looking at a move on Iberia teamed with Spain's Gestair, a company that leases aircraft to the airline.

- (Financial Times service)