Could Qantas’s ambitions for a link-up with British Airways be over before they have really started?

There’s news from London that BA’s other potential partner, Iberia, is upset and will tell BA it’s either them or us. Obviously Iberia is a one-airline airline.

Iberia seems to be rightly teed off that BA had kept it in the dark about the Qantas talks, despite having had lengthy negotiations over the possible merger with Qantas.

Qantas and BA had supposedly been talking since around June-August, Iberia and BA from around July. 

The Financial Times reported this morning that the head of Iberia said in London on Wednesday that it would be “too complex” for BA to pursue both deals.

According to the FT, Iberia CEO Fernando Conte said he was due to meet Willie Walsh, BA chief executive, “pretty soon” to clarify where their talks were going, after being informed of BA’s rival secret talks with Qantas only an hour before BA’s public announcement on Tuesday.

Iberia has been negotiating a merger with BA for five months, and the FT reported that Mr Conte said he had had no knowledge of the BA talks with Qantas, which had been running in parallel and in secret.

“I don’t have too much information about what has happened between BA and Qantas since August,” he told a meeting of the UK Aviation Club in London.

“I knew about it one hour before it was published, when Willie Walsh called me and informed me they were having discussions.

“We have on our agenda a pending meeting to clarify what we are talking about.”

Iberia has accumulated a 9.9% stake in BA in recent weeks to underline its commitment to the talks and to strengthen its hand in the negotiations. BA already has 13.2% of Iberia. What a waste of money.

Willie Walsh is of course the man who brought the world the botched start-up of Terminal 5 Heathrow airport (not Terminal 3 as I reported yesterday) and a multi-million pound cost to BA.

The news came as a leading Australian broking analyst suggested there was little reason for Qantas to be looking at BA and questioned the selection of the UK carrier. 

“While Qantas management has previously discussed the willingness to participate in industry consolidation, the benefits to Qantas from a merger with BA are not clear to us,” Credit Suisse said in a note to clients.

Get more Crikey, for less

It’s more than a newsletter. It’s where readers expect more – fearless journalism from a truly independent perspective. We don’t pander to anyone’s party biases. We question everything, explore the uncomfortable and dig deeper.

Join us this week for 50% off a year of Crikey.

Peter Fray
Peter Fray
Editor-in-chief of Crikey
50% off