After mounting media speculation, London-based British Airways plc
confirmed it was exploring a merger with Australia's Qantas Airways Ltd., via a dual-listed company structure. BA also said it was continuing deal talks with Spain's Iberia Líneas Aéreas de España SA that would create Europe's No. 2 airline.
The Qantas announcement comes as the AP
reported the Australian government plans to increase the level of foreign ownership allowed in the flagship carrier from 25% to 49%. A
government announcement also noted it would not permit a takeover. One trader told Reuters, "Basically, [the proposed deal] means [BA] would have got long-haul flight-sharing with Qantas. Qantas has a big exposure in the far east, so ultimately it will cut down the cost for BA."
BA is also seeking antitrust immunity for a deal with American Airlines and Iberia Lineas Aereas de Espana SA to
coordinate flights and schedules across the Atlantic. Richard Branson of Virgin Atlantic is running a publicity blitz to block the deal. By the way, he made good on a promise to plaster some of his planes with the slogan "No way BA/AA."
Airlines are looking to each other for
support via dealmaking as the global credit crunch slows demand. On Monday, Ireland's Ryanair Holdings plc renewed its quest for ailing domestic rival Aer Lingus Group plc. -
Baz Hiralal
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