BA and Qantas to marry

IT has been reported that both Qantas and Iberia are in merger discussions with British Airways as the consolidation in the airline industry looks set to gather pace. The carriers blamed the worsening global economic slump, which is having a knock-on effect particularly to air cargo demand.

The airlines will keep their own brands and corporate identities but work under one combined executive team.

Although Australian federal law prohibits any Australian carrier merging with a foreign company, its government is reportedly forming plans change the regulations to make the deal possible.

Talks concerning a merger with Iberia have been continuing for several months, however, specific details of the merger or ‘marriage have yet to materialise.

BA is also hoping to expand its alliance with American Airlines to create a ‘global airline’ if all three deals come to fruition. However, there has been much opposition to an AA deal. Steve Ridgway, chief executive of Virgin Atlantic, said: “One day it’s Iberia, then it’s American and now Qantas. The only strategy BA seems to have is to lock up some of the busiest routes in the world, against the consumer interest.” Australian law limits foreign ownership of Qantas to 35 per cent but Canberra proposes to increase this to 49 per cent.

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