Qantas-British Airways Merger Dead

Post by Sharat on June 9, 2009 · Under Australian Economy, Business News, Company News, International Business News, Mergers & Acquistions · Comment

Full service carriers Qantas and British Airways; have admitted that the proposed merger between the two airlines has no chance of being resurrected according to a report in The Australian Newspaper.

British Airways chief executive Willie Walsh has said that though the two company’s left negotiations on cordial terms after a thorough discussions, he accepted the fact that the proposed merger was dead.

Last year, Qantas and BA sat down to negotiate a potential merger valued at US$9.03 billion. By mid December the talks had collapsed, just weeks after they had been made been public, leaving British Airways to consider other merger opportunities with European rivals in a bid to mitigate a collapse in demand.

Both airlines announced the cessation of merger negotiations saying that key terms for a deal could not be agreed upon.

Qantas chief executive Alan Joyce said that the airline wanted to get through the economic crisis and was focusing on its core business.

“As a consequence we are not involved in any active merger talks,” Mr. Joyce said.

The airline industry globally is trying to consolidate and shed capacity on unprofitable routes, building scale in countries where economic growth continues as the economic contraction negatively impacts demand for air travel.

An industry report this week suggested that airlines globally would lose US$9 billion.

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