British Airways PLC said Tuesday it is in talks with Australia's Qantas Airways Ltd. about a potential merger, sending its shares soaring as it confirmed expectations of consolidation in the hard-hit aviation industry. BA, which is already pursuing a revenue-sharing deal with American Airlines and Spain's Iberia SA, said it is exploring a “potential merger” with Qantas “via a dual-listed company structure.” In a brief statement released in response to market speculation, BA did not provide any reasoning for the prospective deal but chief executive Willie Walsh has long advocated industry consolidation, arguing that closer cooperation will help airlines cut costs in the current difficult economic climate. BA, the third-largest airline in Europe, added that its discussions with Iberia on a potential merger are continuing. “There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate,” BA said in the statement to the LSE.
