Airlines merger not cleared for takeoff

Source: Agencies  |   2008-12-19  |     NEWSPAPER EDITION

QANTAS and British Airways have been unable to agree on the terms of a proposed merger that both carriers had hoped would help them fend off an industry downturn.

"Despite the potential longer-term benefits for Qantas and BA, the airlines have not been able to come to an agreement over the key terms of the merger, at this time," Qantas said yesterday.

The companies revealed earlier this month that they were discussing a possible consolidation to cope with a global financial crisis that has severely affected passenger demand.

The statement said the airlines would continue to work on their joint business between Australia and the United Kingdom through the Oneworld global alliance, which brings together 10 of the world's carriers in a code-sharing partnership.

Qantas new chief executive Alan Joyce warned two weeks ago that a consolidation of the two airlines was not guaranteed.

The two airlines explored a potential merger by way of a "dual-listed company structure" in which each company would retain its name and branding. The Australian government had insisted that Qantas remain majority Australian-owned.

Yesterday's announcement came after the Australian stock market closed.