BA in merger talks with Qantas

British Airways today revealed it was in talks over a potential merger with Australian rival Qantas.

Shares in BA jumped 14% after the Heathrow-based operator said it was looking to achieve a tie-up through a dual-listed company structure.

BA confirmed that separate merger talks with Spain’s Iberia were continuing.

BA said in a statement: “In response to recent media speculation, British Airways confirms that it is exploring a potential merger with Qantas Airways via a dual-listed company structure.

“The discussions between British Airways and Iberia are continuing.

“There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate.”

Speculation over a possible tie-up with Qantas has surfaced following indications that the Australian government is prepared to review ownership restrictions relating to the Australian flag carrier.

BA sold its 18% stake in Qantas in 2004, having secured a 25% holding in 1993.

There is currently a 25% individual foreign ownership limit, but Qantas could gain more flexibility to pursue a tie-up with a foreign carrier if it only needed to meet the requirement that it is 51% Australian owned.