Morgan Stanley and UBS have been drafted in to advise British Airways and Iberia on their merger talks after the UK airline yesterday said it could reach a deal with the Spanish carrier in the coming months.

British Airways has called on UBS, its joint broker and financial adviser, along with Merrill Lynch to advise it on the talks. Merrill has yet to pick up a role on the deal, although a source said the US bank was likely to pick up a mandate.