UK's largest international airline British Airways (BA) and Australia's Qantas Airways have failed to reach an agreement on the terms of the merger, which could have helped them counter the current downturn in the industry.
"Despite the potential longer term benefits for Qantas and BA, the airlines have not been able to come to an agreement over the key terms of the merger, at this time, " the two companies said in a joint statement.
Meanwhile, Qantas and BA would continue to work together on their joint business between Australia and the UK and as part of the oneworld alliance, it added.
The two companies had explored a potential merger by way of a 'dual-listed company structure' in which each would have retained their name and branding.
Earlier this month, Qantas which was in talks with British Airways for a possible merger had said it might face hurdles as number of issues remained to be resolved.
Qantas Chief Executive Officer Alan Joyce had said: "There is no guarantee that any transaction would be concluded. There were a number of significant matters that still need to be resolved, including agreeing an appropriate merger ratio and resolving issues around BA's pension fund and the broader economic outlook."
As per reports, combining BA and Qantas could have created an airline with revenues of $25 billion and a fleet of nearly 500 aircraft. BA flies to 154 destinations, while Qantas services 85.
Further, discussions between British Airways and Spain's leading air transport group Iberia are also continuing.