BA is exploring possibility of a potential merger with Qantas in a bid to consolidate global aviation industry.

In response to an initial approach from Qantas, BA revealed that it was exploring the feasibility of a merger in ‘dual-listed company structure’ with the Australian flag carrier.

BA chief executive, Willie Walsh, described this as an exciting first ever step in the creation of truly global airline. He claimed that BA and Qantas’s views on consolidation were very much in agreement and their networks were complimentary to each other.

Giving details of the structure, the carrier spokesman informed that each airline would be an independent legal entity and will be having separate shareholders. It would be a merger of equals with joint board of directors, integrated management team and combined balance sheet.

BAA group was also holding discussions with Spain’s Iberia, but the investment bankers warned that it would be difficult for BA to manage both deals simultaneously.

Merger deal move was bitterly criticised by the rival Virgin Atlantic. Its chief executive, Steve Ridgway, remarked that one day it was American, some other day Iberia and now Qantas. He alleged that BA is just interested in locking up its busiest global routes against consumer interest.

BA and Qantas are party to Oneworld global alliance and BA had 25% stake in Qantas but sold 18.25% in 2004.