British Airways will have to choose between Qantas or Iberia as a merger partner, the head of the Spanish carrier has said.
Iberia chief executive Fernando Conte ruled out a three-way merger as “too complex”.
BA and Iberia have been in merger discussions for several months, but this week BA and Qantas confirmed they have also been in talks since August.
In a terse statement following a leak in Australia, BA said its discussions with Iberia “were continuing”.
Conte said he learned of BA’s approach to Qantas “only one hour before it was published”.
The proposed deal with Iberia has been held up by wrangling over the respective value of the airlines. BA expected Iberia to be a junior partner in a merged airline, but the UK carrier’s share value has fallen heavily over recent months leading Iberia’s major shareholders to demand a greater stake.
Iberia has taken a 9.9% stake in BA in recent weeks, with BA holding 13.2% of shares in Iberia.
Consolidation among airlines is being driven by a sharp downturn in traffic after a year of crippling fuel prices.
BA reported a 10.8% fall in premium traffic and 4.8% decline in economy passengers in November compared with a year ago.