BA exploring merger with Qantas

The Australian government may change foreign ownership rules

British Airways has said that it is exploring a potential merger with the Australian flag-carrier Qantas Airways.

BA warned there was "no guarantee that any transaction will be forthcoming".

In a statement, BA said that the merger would be through the creation of a dual-listed company, so it would be listed in London and Australia.

It follows indications from the Australian government earlier in the day that it may be prepared to relax the rules on foreign ownership.

Under current Australian law, Qantas must be at least 51% Australian-owned.

Any individual foreign airline can only own up to 25% of it and only a total of 35% may be owned by foreign airlines.

Transport Minister Anthony Albanese proposed earlier on Tuesday that the rules be changed so that while 51% must still be Australian-owned, the remaining 49% may be owned by a single foreign airline.

Consolidation

The future of Qantas has been uncertain since an 11bn Australian dollar ($7.1bn;