By Jason Theodorou

British Airways, American Airlines and Iberia have won regulatory approval from the European Union to enter into a merger that will make them the world's third largest airline. The airline carriers hope that the merger will allow them to compete with their major rivals, including Lufthansa, Air France and the low cost Ryanair.

The merged company will have access to coveted take-off and landing slots at London Heathrow - but must share more of their profitable trans-Atlantic routes, to quell antitrust concerns that the three biggest airline companies would control these routes outright and raise prices.

One of the last obstacles to the merger was sorting out the £3.7 billion deficit in BA's retirement plan. BA have since submitted a detailed proposal to Britain's Pensions Regulator on how to close this gap. Staff and external trustees of the program have already voiced their approval.

One of the last big hurdles in the merger had been sorting out BA's £3.7 billion ($5.61 billion) deficit in its retirement plan. In a mark of progress on that front, BA last month submitted to Britain's Pensions Regulator a blueprint for closing the gap. Staff and external trustees of the program have already approved the approach.

The European Commission said the merger would not prevent competition in the markets. An EU executive said in a statement: 'The Commission's investigation confirmed that the merged entity will also continue to be subject to competition from a number of competitors on the markets for air cargo transport and groundhandling services'.

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