British Airways, Qantas in merger talks

02 December 2008

British Airways Plc has confirmed that it is exploring a potential merger with Qantas Airways Limited via a dual-listed company structure. BA, however, said there is no guarantee that any transaction will be forthcoming.

The airline website release said a further announcement will be made in due course, if appropriate.

At the same time, discussions between British Airways and Iberia are also continuing. Talks between British Airways and Iberia, however, have languished because of Iberia's concerns about the UK airline's pension liabilities. 

Quantas is altogether a different proposition, for BA had a 25 per cent stake in the Australian airline early 1990s that it sold in 2004.

The merger proposal, however, is expected to hit a roadblock as the Australian government has finalised plans to cap foreign ownership in airlines at 49 per cent to keep Singapore Airlines out of the US-to-Australia route.

Airlines, hit by the high fuel prices and rising operating costs, are still struggling to find demand as the world's major economies contract. This has forced some of the major airlines like Air France and KLM to combine functions while maintaining separate brands.