Monday, November 23, 2009

BA/Qantas Still a Possibility

With the ink barely dry on its merger deal with Spain's Iberia, British Airways CEO Willie Walsh told the Financial Times that a merger with Australia's Qantas could still happen (though no timetable was provided).  See Rebecca Keenan & Tim Smith, BA Still Keen on Tie-Up With Qantas, Sydney Morning Herald, Nov. 24, 2009 (available here).  In his interview, Walsh stated that political opposition to the deal within Australia constitutes a "major hurdle."

That's not the only hurdle, however.  When a BA/Qantas merger was first discussed last year, observers pointed out that a foreign ownership profile for the Australian airline could compromise its right to be designated under Australia's bilateral air services agreements with such important partners as Japan.  Given its long history of air transport protectionism, it's no surprise that Japan was absent from last week's Agenda for Freedom Summit sponsored by the International Air Transport Association.  With Japan still refusing to sign an open skies agreement with the U.S. and still committed to limiting airport access to foreign carriers, there is no evidence that it is inclined to begin waiving the restrictive nationality clauses in its bilaterals.

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