Decades ago flag carriers were jealously protected extensions of a nation’s foreign policy. But Spain and Britain will enter a new era of aviation fraternity tomorrow when British Airways and Iberia shareholders are expected to back a 4bn merger.

Investors in both companies will hold extraordinary general meetings in London and Madrid to vote on the creation of a new superpower in the global market: International Airlines Group. IAG follows in the slipstream of Air France-KLM, created by the merger of the French and Dutch national carriers, and Germany’s Lufthansa, which has gathered the Swiss and Austrian flags under its wings in recent years.

A BA spokeswoman said: The industry is moving towards consolidation. This is an important step for both airlines. BA will retain its brand – and distinctive tailfin – if the merger goes ahead, with Iberia also maintaining a separate identity. BA’s chief executive, Willie Walsh, will lead the combined, London-based group and has pledged to wring €400m (339m) of cost savings from a combined fleet of more than 400 planes and a 57,000-strong workforce.

In the past BA’s attempts to alter its identity have met stiff resistance, including a notorious attempt to alter its tailfins that drew the ire – and covering handkerchief – of Margaret Thatcher. But the headwinds of a global downturn and cut-throat competition have ensured that the creation of IAG has been largely unopposed. Even Sir Richard Branson, founder of arch-rival Virgin Atlantic, has ignored the deal and instead mounted a failed campaign to prevent a strategic tie-up between BA and American Airlines.

In common with the rest of the industry, BA has struggled to deliver satisfactory returns to shareholders over the cycle, said Douglas McNeill, analyst at Charles Stanley Securities. It has had some good years, but also some very poor ones. Consolidation can help by making it less likely that the industry will collectively invest in too much capacity. He warned that too many seats drive down prices and whittle away wafer-thin margins.

BA is expected to merge with Iberia with the threat of a looming new strike ballot by cabin crew. Tony Woodley, outgoing joint general secretary of the Unite trade union, has warned the organisation is close to staging another poll and is preparing to hold a news conference after the meetings.