British Airways confirms merger talks with Qantas - Summary
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Published
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Tue, 02 Dec 2008 11:28
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London - British Airways confirmed Tuesday that it is in merger talks with Australia's Qantas airlines. In a press release, British Airways said the talks, which would look at a dual-listed company structure, were ongoing. The talks started in August after Qantas approached British Airways. "There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate," the release stated. Shares in British Airways jumped 14 per cent on the news. Qantas is Australia's largest airline and, like British Airways, a member of the oneworld airline alliance. Speculation over a possible tie-up with Qantas surfaced following indications that the Australian government is prepared to review ownership restrictions relating to the Australian flag carrier. Currently, foreign owners are limited to a 25-per-cent stake in the Australian airline. Coalitions of foreign owners may take stakes of up to 35 per cent. In 2004, British Airways sold off an 18 per cent stake it owned in Qantas. Separate merger talks between British Airways and Spain's Iberia are also continuing, British Airways said in the release. The move is part of a growing trend of mergers in the airline industry, spurred both by oil prices that hit record highs in the summer and the ongoing financial crisis. Those factors led British Airways to see a 92 per cent drop in pre-tax profits to 52 million pounds (78 million dollars) for the first half of its business year.
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