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British Air, Qantas Merger Talks Crash

$6 billion deal won't fly after airlines disagree on key issues

By Jim O'Neill, Newser User

Posted Dec 18, 2008 8:13 AM CST

(Newser) – A $6 billion merger between British Airways and Qantas Airways that would have created a global carrier failed to fly after the two sides couldn’t agree on who would control the business, reports Bloomberg. The decision frees BA to pursue talks with Spain’s Iberia. Qantas is likely to pursue an Asian airline that could better complement its business.

Qantas CEO Alan Joyce said the deal would have offered the carriers “long term benefits,” but has been pessimistic about the airlines being able to reach a deal from the onset, citing market value and pension issues, reports the Wall Street Journal. The news of the failed talks sent BA’s stock down in early trading while Qantas gained.

[Images (4)]

[Quotes (1)]

A British tourist reads a newspaper next to a British Airways sign after checking in at a counter for Qantas and British Airways airlines in Bangkok, Thailand, Thursday, Dec. 4, 2008. (AP Photo/Apichart Weerawong)

A British Airways passenger jet and a Qantas Airways passenger jet cross on the tarmac at Sydney's Kingsford Smith Airport Wednesday, Dec. 3, 2008. (AP Photo/Mark Baker)

A British Airways airplane at London Heathrow Airport, Friday Nov. 7, 2008. (AP Photo/Lefteris Pitarakis)

In this July 24, 2007 file photo, a Qantas 767 passenger jet is seen at Sydney Airport, Australia. (AP Photo/Mark Baker,File)

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Despite the potential longer term benefits for Qantas and BA, the airlines have not been able to come to an agreement over the key terms of the merger, at this time."
- Qantas statement

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British Air, Qantas Merger Talks Crash