British Airways and Qantas Fail in Merger Talks

British Airways has said that the £4.1 billion merger negotiations between the carrier and Qantas are called off. This move came after the airlines failed to agree as to who would have control over the new merged company.

Tony Cane, a British Airways spokesman, said that after Willie Walsh, the Chief Executive Officer of British Airways, and Alan Joyce, the Chief Executive Officer of Qantas, were unable to reach an ownership split agreement, negotiations were stopped.

On December 2^nd, both airlines announced that they were having discussions for a merge that would create an airline with about 500 aircrafts and £16 billion in sales, a move that would cut expenses and limit the global recession’s impact.

Negotiations were already tricky due to British Airways having more revenue than the Australian-based carrier, but Qantas is valued higher on the market. The pension deficit of the British airline only complicated the talks further, and British Airways was also being pressured by Iberia, a Spanish carrier, to complete a merger with them.

In a joint statement, the airlines said that despite the long-term benefits of a merger for both carriers, they aren’t able to agree on key terms right now. However, they continued, they will continue working together in their joint business between Australia and the United Kingdom, as well as a part of the oneworld alliance.

One Exane BNP Paribas analyst, Geoff van Klaveren, commented that completing a deal would have been rather hard to do. The bottom line, however, is there probably aren’t many synergies, he continued. This means that British Airways has less options in the race of consolidating, he added.

Find out more about the airlines at: www.britishairways.com -or- www.qantas.com.au