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British Airways would revisit merger agreement with Qantas

6-Sep-2010 5:24 PM

British Airways CEO, Willie Walsh, stated the carrier would resume merger talks with Qantas Airways, last held in 2008, if the Australian carrier was interested, but stated there was not "any evidence" CEO Alan Joyce was seeking a merger (Australian Financial Review, 07-Aug-2010). Mr Walsh previously stated Mr Joyce was less merger-minded than predecessor, Geoff Dixon, adding that British Airways' preferred partners, American Airlines and Qantas, are currently off limits, pushing him to seek acquisition targets elsewhere (Bloomberg, 06-Sep-2010). Responding to the comments, Qantas Head of Corporate Affairs, David Epstein, said: "Qantas has not had any substantive discussions with BA about merger proposals since December of 2008. We do enjoy a good strong working relationship with BA, both as a bilateral codeshare partner and as a fellow member of oneworld, and indeed we recently renewed our JSA (joint services agreement) with BA but we have not had any merger discussions with them" (The Australian, 07-Sep-2010). Mr Walsh stated the carrier has drawn up a shortlist of 12 international carriers identified as attractive investment or acquisition targets (down from a list of 40), adding that Asia, Latin America and Europe offer the clearest opportunities. In Europe, British Airways stated it is keen to bid on bmi should Lufthansa choose to sell the carrier, which is the second-largest holder of London Heathrow slots, while another Lufthansa unit, JetBlue Airways, is also an attractive candidate.

British Airways: “Our competitors will be looking to move on too, so we want to make sure we’re capable of pursuing further consolidation immediately. We intend to be clear in our ambition so that we know who is attractive and who would be attractive if the opportunity arose,” Willie Walsh, CEO. Source: Bloomberg, 06-Sep-2010.