BA's Chief Executive Officer Willie Walsh said consolidation "is long overdue," the British Broadcasting Corp. reported.
"The aviation landscape is changing," Walsh said.
Iberia's Chairman and Chief Executive Officer Fernando Conte said the merger "would be good news for our customers."
BA is the larger of the two with a market value of $5.74 billion, compared with Iberia's $3.23 billion. BA owns 13.2 percent of Iberia while Iberia recently purchased 2.99 percent of BA, the BBC reported.