British Airways in Merger Talks with Qantas

British Airways is in talks with Australia's Qantas Airways about a potential merger, the firm said today, sending its shares soaring as it fueled expectations of consolidation in the hard-hit aviation industry. Already pursuing a revenue-sharing deal with American Airlines and Spain's Iberia SA, BA said it’s exploring a "potential merger" with Qantas "via a dual-listed company structure."

In a brief statement released in response to market speculation, BA did not provide any reasoning for the prospective deal, but chief executive Willie Walsh has long advocated industry consolidation, arguing that closer cooperation will help airlines cut costs in the current difficult economic climate. The London-based carrier's stock jumped more than 12% after the announcement to $2.35. (More British Airways stories.)