UPDATE 2-No word on BA merger from Iberia board

* Iberia board ends without announcement

* BA still embroiled in strike action

* BA shares up 2.8 percent, Iberia 1.9 percent higher

(Rewrites with Iberia board meeting, adds graphic, updates shares)

By Tracy Rucinski and Rhys Jones

MADRID/LONDON, March 25 (Reuters) - Spanish airline Iberia's IBLA.MC board meeting ended on Thursday without a decision on its tie-up with British Airways BAY.L but a spokesman said he still expects a merger announcement this month.

Some expected the meeting to set a date for the merger to create the world's third largest airline by revenues, behind Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE).

Both carriers have said they would sign a definitive deal by the end of March but BA has been hit by a three-day cabin crew strike earlier this week.

BA hopes to avert a second four-day stoppage from Saturday, grounding flights before the Easter holidays. The dispute centres on cost cuts and staffing levels. [ID:nLDE62M2GN]

"(Iberia) is likely to use the BA cabin strike as an excuse for delaying the announcement, but we still expect a deal soon," said one analyst in Spain.

Struggling against a sharp industry downturn and rising low-cost competition, the two loss-making airlines hope to fly the merged entity with 419 aircraft by the end of the year.

BA shares were 2.8 percent up at 252.4 pence by 1439 GMT, while Iberia was up 1.9 percent at 2.68 euros, off a high of 2.73.

The main stumbling block to the merger will be an agreement on how to address BA's pension fund deficit which analysts believe stands at around 3.7 billion pounds ($5.5 billion). [ID:nLD644350] [ID:nLDE61O0BC].

Last week, BA struck a deal with trade unions on its pension scheme in a first step towards addressing its yawning pension deficit. [ID:nLDE62F1XS] --------------------------------------------------------------