British Airways and Qantas end merger talks

British Airways and Qantas have said they are unable to agree on terms for a proposed merger they had hoped would help them cut costs during the downturn in the airline industry and the global economy.

“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,” the airlines said in identical statements released on Thursday.

Earlier this month the two carriers revealed that they were in discussions regarding a consolidation that could help both cope with the global financial crisis that has led to a sharp drop in passenger demand.

Thursday’s statements indicated that the two airlines would continue cooperating on their joint business operating between the UK and Australia through the oneworld alliance. The alliance joins 10 international airlines in a code-sharing partnership.

Alan Joyce, the new Qantas chief executive, issued a warning two weeks ago that there was no guarantee that the consolidation with BA would occur. What he said at that time was that a merger could be beneficial, but a number of factors had to be considered.

The discussions were focused on a “dual-listed company structure,” allowing each carrier to retain its name and its branding. No other details were released, except that the Australian government required Qantas to remain under majority Australian ownership.

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