EUROPE & CIS: BA Qantas tie-up talks to continue in new year

Willie Walsh, BA chief executive and former Aer Lingus colleague, are understood to have met on “neutral” ground in Hong Kong, home of Cathay Pacific, one of their partners in the Oneworld code and passenger sharing alliance in early December, according to wire reports. Australian sources said advisers to the two sides – UBS, Macquarie […]


Willie Walsh, BA chief executive and former Aer Lingus colleague, are understood to have met on “neutral” ground in Hong Kong, home of Cathay Pacific, one of their partners in the Oneworld code and passenger sharing alliance in early December, according to wire reports.

Australian sources said advisers to the two sides – UBS, Macquarie Group and Greenhill – would start fresh talks after the Christmas holiday to hammer out the final details of a merger that involves the two carriers maintaining separate listings in London and Sydney but with a single board of directors and combined balance sheet.

The Australian Government re-affirmed its support for the US$5.9 billion merger as long as it’s not a takeover and continued to insist that Qantas must remain 51 per cent Australian-owned for reasons of national security.

BA, whose 1.8 billion pound (US$2.7 billion) market value is only a fraction smaller than Qantas’, also said merger talks were continuing with Spain’s Iberia to form the world’s third-largest airline.

A three-way tie-up between BA, Iberia and Qantas would create the world’s biggest airline, with combined scheduled passenger kilometres flown of almost 270 billion a year, comfortably overtaking American Airlines 222.8 billion. Conte said that despite Qantas initiating talks with BA in August, he only found out about the plans when BA CEO Willie Walsh phoned him an hour before they were made public in late November.