BA decides to seek 25% of Qantas

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The Independent Online
BRITISH AIRWAYS is today expected to announce that it is going ahead with a bid for a minority stake in Qantas, the Australian flag-carrier, which is being partially privatised, writes Michael Harrison.

The BA board decided yesterday to submit a bid for 25 per cent of Qantas, the sale of which is set to raise about Adollars 1bn (pounds 450m) for the Australian government.

Australia is selling 49 per cent of Qantas. Foreign airlines will be limited to a maximum stake of 25 per cent, while overseas institutions will be allowed to buy a further 10 per cent.

Should BA's bid succeed, it would extend its global reach significantly, giving it a toehold in the air market between the south Pacific and the west coast of America.

However, it faces strong competition from Singapore Airlines and Air New Zealand, which are set to enter rival bids before the deadline for offers closes today.

BA will not disclose the price it is offering for the 25 per cent stake and is expected to stress that its bid is conditional on a recapitalisation of Qantas by the Australian government before the sale goes through.

Sir Colin Marshall, BA's chief executive, said yesterday: 'If we do bid we will bid what it is worth and we will not go over the top.' He also disputed suggestions that Qantas's management was opposed to a bid by BA.

Sir Colin said BA remained confident that its dollars 750m tie-up with USAir would be approved by US regulatory authorities by the deadline of Christmas Eve, although it was unclear whether approval would be linked to prior agreement on an 'open skies' policy between Britain and the US.