New Qantas boss Alan Joyce yesterday conceded there was a very reasonable chance controversial merger talks with British Airways would come to nothing.
The hurdles standing in the way of a $9billion tie-up – namely BA’s inferior economic state, and strict regulatory rules – were significantly tall and numerous, he said.
But if the merger talks progressed to the next level, Mr Joyce believed Qantas would be in the driver’s seat to secure a better deal for its shareholders than its rival could for its own investors.
In his inaugural speech as the head of the national carrier, Mr Joyce said the Qantas board was also not ruling out concurrent talks with an Asian carrier, regardless of the outcome of the Qantas-BA negotiations.
It was the first time the 42-year-old Irish-Australian had officially commented on the merger talks, having been caught out by a media leak in London last week.
He would not be drawn on the details of the BA talks, or the likely make-up of a dual-listed company.
“There is a very reasonable chance that this might not go ahead. We are still in a position where there are significant hurdles to overcome,” he told an Australia-Israel Chamber of Commerce lunch.
“There is absolutely no guarantee that a transaction will be forthcoming. There is a lot of discussion and reviews that need to be done before we get comfortable.”
One thing that will be certain in any merger is the protection of Qantas’s iconic branding and identity, as well as majority local ownership.
Mr Joyce, only in the top job for 10 days, ruled those as non-negotiable items.
While admitting many Australians would have a passionate opinion on why Qantas should not merge with another carrier, he believed it was vital.
The firm believer in airline consolidation said if it wasn’t to be with BA, it would be with another global-focused carrier, most likely in Asia.
Meanwhile, the Qantas boss also had a pot shot at the Australian media for “playing a role” in tarnishing the airline’s image. He admitted Qantas had dropped the ball on its on-time performance this year, but said media coverage had been excessive and focused on routine problems faced by every airline.
“Quite ordinary events, like minor technical faults that require attention before departure, and aircraft substitutions have received disproportionate and even alarmist coverage,” Mr Joyce said.
Qantas shares surged 7.21 percent yesterday, closing 16c up at $2.38, giving the company a market value of $4.6billion.