BA and Qantas give up on merger

Heathrow planes British Airways has abandoned plans to merge with Qantas, as BAA are told to sell both Gatwick and Stansted. Good news for West London?

The plan had been to create a so-called “merger of equals” via a dual-listed company structure after failing to agree on “key terms”.

The airlines said yesterday that after detailed discussions, they had not been able to proceed with the plan. Th collapse of these discussions leaves BA clear to focus on the deal it has been discussing with Iberia.

“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,” the airlines said. “Qantas and BA will continue to work together on their joint business between Australia and the UK and as part of the Oneworld alliance.”

Meanwhile, the Competition Commission's recent ruling that BAA should sell Gatwick, Stansted and Edinburgh has also just been announced. This will clearly refocus BAA on expansion at Heathrow, and the quest for the third runway.

That BA will not be seeking to rationalise resources through a merger with Qantas, and BAA will be focussed on accelerating Heathrow's growth is good news for the West London economy, and for commercial and industrial property asset values around the Airport, if not necessarily for those opposed to the third runway.

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