Texas Pacific Group (TPG) is considering a €4 billion (£2.7 billion) bid for Iberia, Spain’s national airline, in a move that could force British Airways to launch a rival offer, The Times has learnt.

The private equity group is understood to be looking for acquisitions in the European airline sector, but it faces competition from companies such as BA and Lufthansa.

BA owns 10 per cent of Iberia and, if a rival bidder emerged, sources close to the company said that it would consider making its own offer.

Iberia’s shares have risen 22 per cent in the eight days since last Monday and the chairman has admitted that he is open to approaches. A source close to TPG admitted: “They’re looking at it.”

Lufthansa is said to be considering a bid for Iberia. Meanwhile, the German carrier and TPG are competing for another airline, Alitalia, of Italy.

An initial 11 bidders for Alitalia was cut to five and The Times understands that this has fallen to four after a decision by the private equity firm Management & Capitali to bow out.

The remaining Alitalia bidders are understood to be TPG; AP Holding, a vehicle for the Air One head, Carlo Toto, who is bidding with Lufthansa; the Italian bank UniCredit, on behalf of a client; and Matlin-Patterson Global Advisers.

Unlike most other private equity firms, TPG has a history of investing in airlines. It is taking part in an attempted buyout of Qantas and in the past has invested in Continental Airlines, America West and Ryanair. David Bonderman, the group’s founder, is a nonexecutive chairman of Ryanair.

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