Qantas Airways Ltd. shares rose in early trading Friday after the airline and British Airways announced that they had been unable to agree on terms of a proposed merger that aimed to help them fend off an industry downturn.
The carriers announced the breakdown in monthlong talks late Thursday after the Australian bourse closed.
The news did not dampen an upward trend in the share price, which continued into Friday. In early trading, the stock rose 5.7 percent to 2.57 Australian dollars ($1.78). On Thursday, the price had risen 7.5 percent to close at AU$2.43.
The companies revealed earlier this month that they were discussing a possible consolidation to cope with a global financial crisis that has severely crimped passenger demand.
In identical statements Thursday, they said they would continue to work on their joint business between Australia and the United Kingdom through the Oneworld global alliance, which brings together 10 of the world's carriers in a code-sharing partnership.
Qantas new chief executive Alan Joyce warned two weeks ago that a consolidation of the two airlines was not guaranteed.
Joyce said at the time that a merger could be beneficial but that there were factors still being assessed.
The two airlines explored a potential merger by way of a "dual-listed company structure" in which each company would retain its name and branding. They gave no other details.
The Australian government had insisted that Qantas remain majority Australian-owned.
Analysts have been expecting consolidation in the aviation industry because the global economic crisis combined with soaring oil prices earlier this year have severely crimped passenger demand.
Joyce, who took over as CEO last month, had said the consolidation would allow Qantas, the world's 10th largest airline, to remain competitive in the challenging airline industry.
