British Airways is selling its stake in Australian flag carrier, Qantas in a bid to prepare for European consolidation.
The sale will net BA about £425 million, which chief executive Rod Eddington says will go towards paying off some of its £5.6 billion debt and towards strengthening the airline’s balance sheet.
He added: “A strong balance sheet will place British Airways in a robust position for any future European consolidation.”
BA bought the shareholding in Qantas in 1993 for around £304 million
Qantas chief executive officer, Geoff Dixon, said there were no hard feelings. “The ‘tyranny of distance’ between Australia and the United Kingdom rules out such consolidation, but not cooperation, between Qantas and British Airways.”
The airlines will continue to codeshare on between the Europe, Asia and Australia. The Joint Services Agreement between British Airways and Qantas was recently approved for a five-year extension by the Australian Competition and Consumer Commission.
Mr Dixon also hinted that Qantas would be looking for tie-ups with airlines closer to home in the Asia Pacific region.
Trading in Qantas shares have been suspended for 48 hours following the announcement by BA that it wants to sell the 18.25% share.
Report by Ginny McGrath
