Updated from 2:41 a.m. EST

MADRID (

TheStreet

) --

Iberia

, the Spanish airline, reported Friday it swung to a third-quarter loss of 16.4 million euros ($24.4 million) from earnings a year earlier of 30.4 million euros a day after it was announced it planned to merge with

British Airways

(BAY)

.

Operating revenue fell almost 20% to 1.17 billion euros. Load factor in the quarter declined to 82.1% from 83.2% a year earlier as passenger traffic dropped 6%.

Iberia and British Airways agreed to a merger valued at $7 billion after a year of talks. British Airways will hold 55% of the merged company.

The merger is expected to be completed in late 2010, Iberia said in a statement Friday.

Shares of British Airways were trading higher by 2.8% in London at 5:10 a.m.

-- Reported by Joseph Woelfel in New York

.

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