British Airways plans to sell its stake in Australia's Qantas Airways in the next two days to cut debt and take advantage of future consolidation in Europe.
Europe's second-biggest airline, which has undertaken the most radical restructuring among its peers in the past three years, said the sale of the 18.25 per cent stake would have no effect on the business relationship between the two carriers. The stake is worth an estimated €640 million.
"We now believe it is in our best interests to sell our shares to pay down our debt and continue to strengthen our balance sheet," Chief Executive Rod Eddington said in a statement on Wednesday. "A strong balance sheet will place British Airways in a robust position for any future European consolidation."
BA told shareholders in July last year its close ties with Spanish airline Iberia would be at the heart of any consolidation in Europe. BA owns about nine per cent of Iberia.
BA said the sale of the Qantas stake, which has reaped the carrier €300 million in dividends over the past 11 years, would be an underwritten offering.