British Airways and Qantas have failed to reach agreement over the terms of a potential £4.1 billion merger deal.
Following "detailed discussions about a potential merger" and the possible "longer term benefits to both" the two sides have failed to agree at this time.
Despite the failure, both Qantas and British Airways will continue to cooperate on their joint business between Australia and the UK, as well as part of the oneworld organisation.
Qantas chief executive Alan Joyce warned only last week obstacles remained to a potential merger, with the Australian airline only ready to proceed if strong commercial and operational benefits.
Talks were announced earlier this month, to the chagrin of Spanish flag-carrier Iberia, which is also in talks over a possible merger with British Airways.
The merger between BA and Qantas would have created a duel company, listed in both Australia and Britain with the joint business divided between the two carriers.
Shares in British Airways fell 4.1 per cent, to 164.9p, in early trading on the FTSE 100 this morning.
Digg 
Delicious 
Reddit 
StumbleUpon 
Google 
Technorati 
Netvouz