A merger respite from the doom and gloom

Just when the bad news was starting to reach a mind-numbing level, along came some refreshing news, that although related to the downturn, provided the industry with a mental breath of fresh air. The confirmation of talks between Qantas and British Airways was not the biggest surprise on record, but it did provide not only […]


Just when the bad news was starting to reach a mind-numbing level, along came some refreshing news, that although related to the downturn, provided the industry with a mental breath of fresh air.

The confirmation of talks between Qantas and British Airways was not the biggest surprise on record, but it did provide not only a welcome respite from all the doom and gloom, but also a potential vision of a new era in the airline industry as a result of some much needed consolidation.

But even more interesting was the news that quickly followed – that Malaysia Airlines (MAS) was in discussion with “a number of airlines” including Qantas. Already MAS has a strategic partnership with Qantas for maintenance, repair and overhaul activities.

Industry pundits give a MAS-Qantas tie-up a much better chance at succeeding than a BA-Qantas tie-up, largely based on competition grounds.

As the Centre of Asia Pacific Aviation (CAPA) notes, the MAS-Qantas linkage is a logical one but government red tape would most likely mean Qantas would at a maximum only be allowed a significant minority share.

It looks like a win-win situation according to CAPA’s analysis, with MAS gaining valuable traffic through its KL hub from Qantas’ network – which stopped flying there several years ago in favour of Singapore – while Qantas would gain a secondary hub in arch-rival’s Singapore Airlines backyard. This would provide it with an established base from which to springboard into the heart of Asia and India, CAPA notes.