British Airways (BA) has confirmed in a statement that it is exploring a potential merger with Qantas following recent media speculation.
According to BA, both airlines would retain their own brands in a merger "via a dual-listed structure".
The statement said: "There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate."
The world’s first global airline could be created if the merger goes ahead, with BA currently in discussions with Spanish national carrier Iberia about a further merger and American Airlines about extending its alliance.
If the four carriers combine then the largest airline in the world would be created, capable of carrying 198 million passengers a year – almost six times BA’s current passenger turnover.
The possible mergers have arisen as airlines seek to find the most efficient ways of cutting costs and expanding their networks to attract greater numbers of flight passengers.
BA announced last month that it would be resuming flights between Heathrow and Saudi Arabia after the liberalisation of the aviation market between Britain and the Middle Eastern nation.