BA would be perfect partner, says Qantas

QANTAS has said it would consider a merger with British Airways, less than a year after BA sold its 18.5% stake in the Aussie airline for A$1.1bn (£460m).

Chief executive Geoff Dixon also said he anticipated any merger with another international airline to be within five years.

Most speculation has focused on a deal with Singapore Airlines, but Dixon said a partner was just as likely to be found in London. He also held out the possibility of a merger with Cathay Pacific or Air New Zealand.

But he made it clear any deal would maintain the two separate brands. 'I cannot see, despite some of the things being said in the last few weeks, Australia allowing Qantas to disappear or the brand to disappear,' he told the TV show Business Sunday.

Speculation about a merger reached fever pitch last week when Prime Minister John Howard said he had discussed the idea with his Singapore counterpart two weeks ago. Chief finance minister Peter Costello also weighed in, saying he would consider lifting the 49% foreign investment cap.

Qantas has a budget Asian carrier in a venture with Singapore government investment agency Temasek, but Dixon sought to distance himself from a deal with the national carrier.

'I think I've always said I believe Singapore Airlines... have a tremendous brand, tremendous track record. Yes, they would be a lovely partner but so would British Airways, so would Cathay Pacific,' he said.

BA bought a 25% stake in Qantas for A$665m when it was privatised in 1993, although that was eroded to 18.5% when the former failed to take up rights issues in the company. It made clear at the time of its initial investment that it would have taken a larger stake had it been allowed to.

But BA exited the investment last September to build a war chest for future consolidation in Europe. The two airlines operate a code-sharing arrangement on the lucrative London-Sydney route.

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