Iberian sells 5 planes to B.A.

Spain's Iberia has exercised an option to buy five planes and sold them to British Airways , a spokeswoman for the Spanish flag carrier said, in a sign that the merger partners are moving ever closer.

Iberia's shares were up as much as 2 percent on Friday, before flattening out, against an IBEX-35 index down 2.8 percent at 1143 GMT.

"The two had said that this was one of the areas where they could generate synergies" an analyst in Spain said.

BA and Iberia are hoping for around 400 million euros of annual synergies from their tie-up, which is due to be completed by the end of the year .

A report in Spain's Expansion newspaper said the five Airbus A320 planes had a catalogue value of about 300 million dollars.

The planes originally formed part of Iberia's biggest ever fleet renovation deal, signed in 2005 with Airbus EADS.PA for 30 acquisitions and 49 options on aircraft for delivery to 2011.

British Airways declined to comment.