September 6, 2012 7:08 pm

IAG in talks with Qatar Airways over Asia

International Airlines Group, parent of British Airways, has held talks with Qatar Airways about the possibility of the two carriers forming a partnership focused on Asia.

British Airways and Qantas confirmed on Thursday that they were terminating their joint venture on routes between the UK and Australia in March, after the Australian carrier announced plans for a partnership with Emirates Airline.

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Willie Walsh, IAG’s chief executive, said the joint venture was ending on “amicable terms”, adding it was a “small part” of the group’s network and therefore would not jeopardise its financial targets.

However, he added: “Asia has become a key focus for IAG and we’re talking to a number of airlines about alternative options for us.”

One person familiar with IAG said that it had held discussions with three airlines, including Qatar Airways, about the possibility of a partnership focused on Asia, where air travel in countries such as China is growing faster than in Europe and the US. No final decision has been taken, added this person.

Qatar Airways declined to comment.

Qatar Airways is one of three fast-expanding Gulf airlines, flying to several Asian destinations, and Mr Walsh this year expressed admiration for the Doha-based carrier.

Gerald Khoo, analyst at Espirito Santo, said Qatar Airways was the most likely candidate with which IAG could form a partnership.

“This would offer one-stop connections to Asian destinations and Australia in a mirror image of the Qantas/Emirates arrangement,” he said.

British Airways’ joint venture with Qantas on the Kangaroo route is 17-years-old but its value to both airlines has diminished because of increasing competition, including from the Gulf carriers.

IAG’s dealmaking focus is currently on American Airlines, the US carrier. AMR, American Airlines’ parent, filed for bankruptcy last year, and IAG is considering the case for buying a minority stake in the American carrier, which is also examining a potential merger with US Airways, a smaller rival.

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