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British Airways merger talks with Qantas collapse

Posted in Airline News, British Airways, QantasNo comments

Qantas said that following “detailed discussions” the two carriers could not reach an agreement on the “key terms” of the proposed £3.6bn deal that the airlines have been trying to hammer out in recent weeks.

The news is likely to come as a blow to BA chief executive Willie Walsh who has made it his ambition that the airline is one of a handful of carriers to emege from the current economic downturn and inevitable consolidation. BA has also since July been trying to negotiate a merger with Spanish rival Iberia.

The ending of talks is unlikely to surprise aviation anaylsts in Australia who had failed to see many benefits for Qantas.

The merger was also strongly opposed by Australian unions, who argued it would affect the jobs of several thousand employees.The flag carrier had argued a deal with BA would help it save on maintenance costs and weather the global financial downturn.

Together, the two airlines would have had annual sales of $23bn and a fleet of 500 planes.

Qantas Chief Executive Alan Joyce warned last week that the merger faced major hurdles and would only go ahead if Qantas could secure major revenue and cost benefits.

Today both the airlines said that “Qantas and BA will continue to work together on their joint businesses between Australia and the UK as part of the oneworld alliance.”

Qantas had said that should the talks with BA fail, the carrier might seek to strike a similar deal with an Asian rival.

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