However, there is no fixed date for the deal to be signed, a source with knowledge of the merger negotiations said.

Earlier, Spanish business newspaper Cinco Dias said the Spanish airline had slated February 12 and 25 as possible dates to sign with BA, following the memorandum of understanding agreed in November.

"We aim to sign the merger agreement in the first quarter of 2010," a BA spokesman said on Wednesday.

The two airlines will still need to reach an agreement on how to address BA's multi-billion pound pension fund deficit before their long-planned merger finally becomes a reality. The British airline is due to announce results for its third quarter to end-December on Friday. Iberia reports its full-year results on February 24.

Airwise News (Reuters).

03.02.10