Qantas dumps $8 billon merger proposal

Qantas has abandoned its ambitious attempt to merge with British Airways after the companies failed to agree on terms.

Qantas has abandoned its ambitious attempt to merge with British Airways after the companies failed to agree on terms.

British Airways proposed a merger of equals, with both companies taking a 50% share in the new entity. But it appears Qantas wanted a slightly higher share to reflect its larger market shares and value.

“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,” Qantas said in a terse statement.

The decision by both sides to walk away from the deal ends more than six months of discussions between the two companies, who had hoped to create the world’s third largest airline.

But new Qantas chief executive Alan Joyce is expected to pursue other merger or alliance opportunities over the coming months as airlines across the world look for ways to insulate their businesses from one of the worst downturns in aviation history.

Airline industry experts expect Qantas will look to strengthen its position in Asia in the short term, with Malaysia Airlines one potential partner.

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• Why the Qantas/British Airways merger won’t happen: Kohler
• Qantas and British Airways in $8 billion merger talks