British Airways has appointed UBS to advise on whether to make a counter-bid for Iberia after Texas Pacific Group offered €3.5 billion (£2.4 billion) for the Spanish airline.

BA owns 10 per cent of Iberia’s shares, has preemptive rights on a further 30 per cent and has long considered a takeover of the Spanish flag carrier — a move that would create Europe’s preeminent airline.

BA said yesterday that it was appointing UBS to evaluate its options.

Meanwhile, The Times has learnt that BA is strengthening its position at Heathrow by buying landing slots from bmi. Fifty-one landing slots have changed hands between the British airlines for approximately £30 million.

The slots come from British Mediterranian (BMED), which was bought by bmi last month from the family of Wafic Saïd, a Syrian financier. The deal will give BA seven daily pairs of slots and two at the weekend, increasing its share of Heathrow’s capacity to 41.4 per cent.

Heathrow landing slots are jeolously guarded by airlines because the airport operates at 98.5 per cent capacity and extra space becomes available only rarely. BA has pursued a policy over the past decade of buying slots whenever they become available, increasing its share from 37 per cent.

Control of these slots has become even more important to BA after a decision by European transport ministers to approve an “open skies” agreement with the United States. This will open Heathrow to all airlines from next March and BA wants as many landing slots and as much phsyical space at the airport to keep out new competitors.

Sir Michael Bishop, the chairman and controlling shareholder of bmi, formerly British Midland, is understood to be considering what to do with his holding and has spoken to a number of airlines. BA would look at bidding for bmi if Sir Michael agreed to sell. Virgin Atlantic is another potential bidder.

However, the immediate acquisition issue for BA is whether it takes on TPG in a race to buy Iberia.

In a statement the company said: “In the light of Iberia’s announcement that it has received a bid approach, British Airways has decided to appoint UBS to advise on how to use British Airways’ 10 per cent holding in Iberia in the best interests of British Airways shareholders. The advice will examine all options, including a disposal of British Airways’ holding.”

BA may struggle to go alone in bidding for Iberia, as it is already carrying £1 billion in debt and has to pay off a pension deficit of £2.1 billion. A joint bid with a private equity group might be possible, or BA could concede defeat and sell its shares to Texas Pacific.

However, this could leave BA isolated as the European aviation sector begins to consolidate. Lufthansa, the German carrier, is bidding for Alitalia, of Italy, and is also thought to be interested in Iberia. Air France-KLM is another company with aspirations to buy rival airlines in Europe.

Texas Pacific confirmed an approach for Iberia worth €3.6 a share yesterday. This was lower than the €4 a share that Iberia is trading at and analysts believe that the United States-based private equity firm’s offer will have to rise.

This bid for Iberia also raises questions over whether Texas Pacific will continue with its plans to buy Alitalia and Qan-

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