British Airways (BA) said it is willing to go into merger talks with Australian carrier, Qantas, if the Australian firm still has interest. British Airways had previously, albeit unsuccessfully tried to create a merger with the Australian carrier. In a newspaper interview, BA said it had done its part in communicating with Qantas in 2008, reiterating that the firm had presented a strong case for the acquisition.

According to BA, the merger talks are possible again if Qantas shows interest or is like minded, Willie Walsh told the Australian Financial Review. However, Walsh’s comments come in the wake of investment plans by BA and Iberia, with the two firms announcing their intention to acquire 12 possible firms. BA and Iberia said they had identified 12 potential acquisition targets to follow through, once their merger is concluded.

However, the two firms reiterated that their focus will be on Asian expansion. But even so, analysts are following the announcement keenly, with strong speculation that Qantas might be one of the 12 potential acquisition targets under BA’s and Iberia’s radar. Analysts have argued that a potential Qantas takeover is possible, as the two firms’ together stand to develop a big synergy, coupled with the fact that Asia is where there seems to be growth.

Qantas is currently undertaking its own restructuring and Walsh’s comments might portend a long term investment, said analysts. This is due to Walsh’s assertion that Qantas chief executive, Alan Joyce, may not be keen on merger plans as it is. Even so, BA believes things may change, said Walsh. BA and Qantas, then under chief executive Geoff Dixon, held merger talks in 2008, but Qantas called off discussions over a disagreement on the airlines' relative valuations.

Dixon's successor, Joyce, has said Qantas had its eyes on using its strong balance sheet to lead consolidation in the Asia-Pacific region. Qantas said it had not held talks with BA since the flop of the initial merger talks in 2008, reiterating that its dealings with BA and Iberia have been on bilateral trade and as One World partners.

Walsh said that BA and Iberia were already looking at opportunities for further airline consolidation. According to Walsh, BA will be surprised if “something does not happen within the first year of its merger with Iberia,” he said.

8 Sep 2010.