BA merger not guaranteed, insists Qantas boss

The Irish-born chief executive of Qantas Airways Ltd said today the Australian flag carrier was in a strong position in merger talks with British Airways but stressed that a consolidation of the two airlines was not guaranteed.

The Irish-born chief executive of Qantas Airways Ltd said today the Australian flag carrier was in a strong position in merger talks with British Airways but stressed that a consolidation of the two airlines was not guaranteed.

Alan Joyce, making his first public comments since the merger talks were revealed last week, said a tie-up could be beneficial but that there were factors still being assessed.

“These are still only talks. There is no guarantee that any transaction will be concluded,” Mr Joyce said. “There are a number of significant matters that still need to be resolved, including agreeing an appropriate merger ratio and resolving issues around BA’s pension fund and the broader economic outlook.”

The two airlines confirmed last week that they were exploring a potential merger by way of a “dual-listed company structure” in which each company would retain its name and branding. They gave no other details.

Analysts have been expecting consolidation in the aviation industry because the global economic crisis combined with soaring oil prices earlier this year have severely limited passenger demand.

Former Aer Lingus executive Joyce, who took over as chief executive officer last month, said the consolidation would allow Qantas to remain competitive in the challenging airline industry. But he said the airline would do what was best for its shareholders.

“Qantas comes to these negotiations from a position of strength,” Mr Joyce said. “We are in these discussions because a merger has the potential to create the global scale that would allow us to grow and enhance our services, and deliver significant revenue and cost synergies – all to the benefit of our customers, our employees and our shareholders.”

He said the company would remain majority Australian-owned and headquartered, a concern of government officials who last week said a merger must be based on the Qantas Sale Act, which limits foreign ownership in the company.

“All I can say to all Australians is this: whatever happens, Qantas will remain majority Australian-owned, the vast majority of employees will always be Australian, and Australia will remain our headquarters,” he said.

“Our fantastic brand is built around our Australian identity and our special role in Australian life – that’s a big part of what makes us attractive to potential partners. This will never change.”

The Australian government disclosed last week that it plans to increase the level of foreign ownership allowed in Qantas to 49%, but will not permit a takeover.

Australian law currently limits a single foreign holding to 25%, while a group of foreign holdings can total 35%. That change would allow Qantas and BA to swap equal stakes in each other.

The Australian Financial Review newspaper reported that Mr Joyce met with his BA counterpart and former Aer Lingus colleague Willie Walsh in Hong Kong on Saturday. Mr Joyce did not mention that meeting in his speech today.

more courts articles

Micah Richards ‘grappled’ with man accused of headbutting Roy Keane, court told Micah Richards ‘grappled’ with man accused of headbutting Roy Keane, court told
Roy Keane ‘in shock’ after being ‘headbutted’ through doors, court told Roy Keane ‘in shock’ after being ‘headbutted’ through doors, court told
Roy Keane ‘in shock’ after being ‘headbutted’ through doors, court told Roy Keane ‘in shock’ after being ‘headbutted’ through doors, court told

More in this section

Sir Anthony O'Reilly Colin Sheridan: Larger-than-life O’Reilly left his mark in business circles
Currys' financials Currys shares jump on trading update a month after retailer rejected unwanted takeover offer
Joe Biden Biden increases tariffs on Chinese imports of electric cars and chips
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited