Merger talks collapse between BA and Qantas

Merger talks between British Airways (BA) and Qantas have collapsed after a deal could not be reached.

The potential merger, worth $6.4 billion (£4.1 billion), was intended to bring the airlines together as a dual-listed company, in both the UK and Australia.

Despite the “potential longer term benefits” they had “not been able to come to an agreement”, confirmed the airlines in a joint statement.

However, the two airlines said they will continue to co-operate on their joint business between the UK and Australia, and as part of the Oneworld global alliance.

However, a merger between the two would have faced many hurdles and according to Alan Joyce, Qantas chief executive, the merger would only go ahead if Qantas could secure major revenue and cost benefits.

Meanwhile, BA said it would not agree to Qantas owning more than 50% of the combined firm, even though Qantas is currently the larger company by market value.

The airline industry has suffered this year amid soaring jet fuel costs and the economic downturn, which has led to many airlines going bust and consolidation in the industry.

However, as the price of oil continues to fall, this should lead to cheaper air fares which may mean a slight recovery in the industry.

Story link: Merger talks collapse between BA and Qantas