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British Airways sells Qantas stake

Travel News Asia 8 September 2004

British Airways has announced its intention to sell its 18.25 per cent shareholding in Qantas by way of an underwritten offering managed by an international bank.

The gross sale proceeds are expected to be not less than A$1,090 million (approximately 425 million).

British Airways acquired its original shareholding in Qantas in 1993 for A$665 million (304 million). Since the original investment British Airways has received A$600 million in dividends.

British Airways chief executive Rod Eddington said: Our shareholders have had a good return from our investment in Qantas. We now believe it is in our best interests to sell our shares to pay down our debt and continue to strengthen our balance sheet.

A strong balance sheet will place British Airways in a robust position for any future European consolidation.

The share sale has no impact on the existing business relationship between the two airlines and is not linked to our joint services agreement (JSA) which continues. The JSA is a strong, well established relationship which brings real commercial benefits to both British Airways and Qantas.

The JSA between British Airways and Qantas has recently been given draft approval for a five-year extension by the Australian Competition and Consumer Commission. The JSA includes joint flight schedules, sales and operations between Australia, South East Asia, the UK and Europe.

A further announcement about the share sale is expected to be made in the next 48 hours on conclusion of the process.

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