The outgoing chief executive of Qantas, Geoff Dixon, says a merger with another carrier is inevitable in the next decade.
Yesterday Mr Dixon, who steps down in November, announced a record $970 million profit for the airline.
But he says the industry is capital-intensive and Qantas will have to consider the move in coming years.
“I just believe Qantas as big as it is – and its just about the 10th biggest airline in the world which is quite amazing when you consider Australia’s the 54th biggest country – but we still are not big enough in five to 10 years to do it on our own,” he said.
“Qantas will always be Australian, it will always have the great majority of its jobs in Australia and its business in Australia, but there has to be a level of maturity when it comes to a discussion on this.
“The airline industry is very fragmented, it’s hugely capital-intensive, other airlines are starting to merge and we must be part of that.”
But Mr Dixon says there is no one in particular that Qantas has its eye on to merge with.
“I think these things just gravitate towards people, I mean your companies, you tend to sit down and you see a community of interest,” he said.
“I’m not saying there’s anybody out there at the moment, all I’m saying is that many airlines are now merging in situations where they probably would not have considered it three or four, even five years ago.
Despite talk of a merger, Mr Dixon has made assurances that Qantas will not lose its well-known red and white logo.
“It doesn’t mean the kangaroo will go, it doesn’t mean the brand will go, it will be probably very similar to what it is now, but people have got to understand that this will happen,” he said.