Newspaper article The Evening Standard (London, England)

BA in a Bid to Merge with Qantas as Air Crisis Grows; Three-Way Get-Together: Willie Walsh Wants to Link Up with Both Qantas and Iberia

Newspaper article The Evening Standard (London, England)

BA in a Bid to Merge with Qantas as Air Crisis Grows; Three-Way Get-Together: Willie Walsh Wants to Link Up with Both Qantas and Iberia

Article excerpt

Byline: ROBERT LEA

BRITISH Airways today revealed audacious plans for a merger with the Australian airline Qantas.

Analysts said the announcement highlights the crisis in the airline industry, as BA is already in merger talks with the Spanish flag-carrier Iberia and discussing a separate marketing alliance with American Airlines. All the deals are aimed at stripping out costs and avoiding route duplication.

Virgin Atlantic one of the few rivals to BA and Qantas on the so-called "kangaroo route" from London to Sydney said a merger of its two rivals would increase BA's domination at Heathrow airport and is likely to result in increased fares on the route.

By trying to pull off so many deals at once, British Airways is aiming to take on its great European rivals, Air France and Lufthansa.

The industry has already seen more than 30 airlines collapse this year and is expected to see carriers' post-aggregate losses for 2008 running into billions of dollars.

It has been an open secret for some time that BA, led by Willie Walsh, has wanted to cement links with worldwide allies like Qantas who are part of the Oneworld alliance of airlines. Oneworld already has reciprocal seat-selling and marketing arrangements.

However, news of BA's move to pull off a three-way, simultaneous, [pounds sterling]6 billion merger with Qantas and Iberia shows the depth of the problems faced by global airlines, and the pace at which the recession is likely to drive consolidation.

It was only last month that Lufthansa took control of BA's great UK rival bmi British Midland, having already bought the Swiss flag-carrier.

In the biggest single European deal so far, Air France tied up with the Dutch carrier KLM. Even budget airline Ryanair is trying to become a European giant by buying Irish rival Aer Lingus.

In a statement, BA said today: "British Airways confirms it is exploring a potential merger with Qantas Airways via a dual-listed company structure. …

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