BA and Qantas plan merger
[December 3rd 2008]
British Airways and Australian airline Qantas have confirmed they are in merger talks.
In a brief press statement BA said: “In response to recent media speculation, British Airways Plc confirms that it is exploring a potential merger with Qantas Airways Limited via a dual-listed company structure”.
The statement continues: “There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate”.
At the same time BA also confirmed that it is continuing discussions with Spanish airline Iberia about a merger.
The dual listing would mean that BA and Qantas would remain separate legal entities although they would have a combined balance sheet and a common management team.
The planned merger between two airline industry giants is the clearest sign yet of airline consolidation in the face of the global economic downturn. The merger between BA and Qantas could effectively create the first truly global airline, and even more so if BA also merges with Iberia.
Although smaller than BA in terms of its fleet and staff, Qantas is valued at around the same amount, £1.8 billion. Qantas’ latest pre-tax profit was £575 million compared to BA’s £883 million. If the airlines merge they would have a combined revenue at today’s figures of almost £16 billion.
BA sold its 18.25% shareholding in Qantas in September 2004, just over a year after it acquired it, realising a quick profit for shareholders.
The alliance between BA and Qantas began as far back as October 1995 when the two airlines announced a Joint Service Agreement.
BA and Qantas began codesharing on their flights in October 1997. BA started codesharing on daily return Qantas flights from Heathrow to Singapore, Melbourne, Sydney, Darwin and Cairns; on four weekly return flights from Heathrow to Adelaide, and two weekly return flights from Heathrow to Brisbane, plus two weekly return Qantas flights between Sydney and Singapore.
At the same time Qantas began codesharing on daily return British Airways flights from Heathrow to Perth, and on five weekly return flights from Heathrow to Brisbane.
Written by: Nick Purdom
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