Post by jackh on Dec 18, 2008 11:37:28 GMT 1
BA and Qantas merger talks collapse
British Airways (BA) confirmed this morning that talks over a merger with Qantas Airways, the Australian national carrier, had ended, with neither side able to agree over key terms.
A successful marriage had been looking increasingly unlikely, with many in the airline industry claiming it would bring little benefit to either company.
In a joint statement, BA and Qantas Airways said that after detailed discussions about a potential merger, talks had now ended.
They added: "Despite the potential longer term benefits to both British Airways and Qantas, the airlines have not been able to come to agreement over the key terms of a merger at this time.
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"British Airways and Qantas will continue to work together on their joint business between the UK and Australia and as part of the oneworld alliance." Shares in BA tumbled 4.1 per cent to 164.9p in early trading.
Under the oneworld alliance, regulators allow them to fix prices and codeshare on the kangaroo route through a joint service agreement that has enabled BA to reduce its Australian flights to twice daily to Sydney.
Last week' Alan Joyce, the chief executive of Qantas, raised doubts over the merger. Of particular concern, he said, was BA's £1.7 billion pension liability, which dwarfs the smaller liabilities carried on Qantas's own accounts.
He said he was also seeking assurance on an appropriate merger ratio, and further clarity on the state of the industry before he could agree to the merger.
He also told BA that a proposed three-way tie up between BA, Qantas and Iberia airlines would not work. BA would have to chose which partner to go with, he said.
Fernando Conte, the chief executive of the Spanish flag-carrier, had also expressed doubt that a three-way deal could work, suggesting that such a move would be “too complex”.
Analysts have suggested that BA's talks with Qantas were an attempt to force Iberia to put its pension deficit concerns aside and get on with negotiating the details of the deal.
Potential cost savings from a merger with Iberia have been estimated at about £400million, but a Qantas deal might have produced only between £100 million and £200 million of savings because of the geographical separation of the airlines.
business.timesonline.co.uk/tol/business/industry_sectors/transport/article5363067.ece
British Airways (BA) confirmed this morning that talks over a merger with Qantas Airways, the Australian national carrier, had ended, with neither side able to agree over key terms.
A successful marriage had been looking increasingly unlikely, with many in the airline industry claiming it would bring little benefit to either company.
In a joint statement, BA and Qantas Airways said that after detailed discussions about a potential merger, talks had now ended.
They added: "Despite the potential longer term benefits to both British Airways and Qantas, the airlines have not been able to come to agreement over the key terms of a merger at this time.
Related Links
Them or us, Qantas tells BA over Iberia link
BA-Qantas talks powered by Irish connection
"British Airways and Qantas will continue to work together on their joint business between the UK and Australia and as part of the oneworld alliance." Shares in BA tumbled 4.1 per cent to 164.9p in early trading.
Under the oneworld alliance, regulators allow them to fix prices and codeshare on the kangaroo route through a joint service agreement that has enabled BA to reduce its Australian flights to twice daily to Sydney.
Last week' Alan Joyce, the chief executive of Qantas, raised doubts over the merger. Of particular concern, he said, was BA's £1.7 billion pension liability, which dwarfs the smaller liabilities carried on Qantas's own accounts.
He said he was also seeking assurance on an appropriate merger ratio, and further clarity on the state of the industry before he could agree to the merger.
He also told BA that a proposed three-way tie up between BA, Qantas and Iberia airlines would not work. BA would have to chose which partner to go with, he said.
Fernando Conte, the chief executive of the Spanish flag-carrier, had also expressed doubt that a three-way deal could work, suggesting that such a move would be “too complex”.
Analysts have suggested that BA's talks with Qantas were an attempt to force Iberia to put its pension deficit concerns aside and get on with negotiating the details of the deal.
Potential cost savings from a merger with Iberia have been estimated at about £400million, but a Qantas deal might have produced only between £100 million and £200 million of savings because of the geographical separation of the airlines.
business.timesonline.co.uk/tol/business/industry_sectors/transport/article5363067.ece