The One World alliance is celebrating it's tenth anniversary, and its member airlines have unveiled a special livery on their fleets. Hope you will enjoy the images. Click on the images to see the high resolution versions.

American Airlines Boeing 777

British Airways Boeing 747

Japan Airlines Boeing 777

Finnair Airbus A340

Royal Jordanian Airlines Airbus A319

Iberia Airbus A320

LAN Chile Boeing 767

Malev Boeing 737
Cathay Pacific Airbus A340
QANTAS Boeing 747

Oneworld has also announced 10% reduction in airfares, a new Circle Atlantic fare, and a free business class tickets contest.

The proposed merger of British Airways and Iberia are threatened, and may be heading for the rocks, after the UK carrier warned it was not prepared to merge with its Spanish counterpart on the basis of current market valuations for the airlines.

Thanks to good performance by Iberia shares, poor performance by British Airways shares, and the sharp decline of the British Pound against the Euro, the market value of Iberia on Thursday exceeded that of British Airways for the first time since the carriers began merger negotiations in July 2008, to form Europe's third largest airline behind Air France-KLM and Lufthansa-Swiss-Austrian-Brussels.

When the merger talks between the two began at the end of July, the respective market capitalisations indicated a share exchange ratio of 65 per cent for BA and 35 per cent for Iberia. The ratio has plunged to only 49.6 per cent for BA and 50.4 per cent for Iberia.

During a visit to Hyderabad, BA CEO, Willie Walsh said

The present valuation was unacceptable. Our shareholders would not accept it; The Iberia share price had "performed well in recent times", I would argue it is overpriced. We will look at this in the negotiations. That work is still to be done. I am not at all concerned about not doing a deal with Iberia. I would walk away if it does not make sense.

Bangalore Aviation readers will recall that valuation disagreement, was a dominating reason for the recent collapse of merger talks between British Airways and QANTAS.

The rising deficits in BA's pension scheme is also a cause of concern for Iberia, and it is due to receive a report by financial consultants, Mercer, by the end of the month.

Iberia executives are realistic, and acknowledge that the recent shifts in market valuation are not reflective of the true values, of the two airlines, but simplest corporate governance demands them to take fullest advantage of the situation, and get a good deal.

The talk from Willie Walsh may be tough, but British Airways is in a tight spot. It is rapidly falling behind in the airline consolidation race; a crucial strategy during these bleakest of times. Their anti-trust waiver requests with American Airlines, are far from through, and if the merger with Iberia fails, I do not see many available options for them.

Bloomberg has an interesting analysis of the risks to British Airways after the failure of its merger talks with Qantas, and why BA must pursue its long dragging discussions with Iberia to success. Click here to read the article.

While airlines have seen one of their biggest expenses, fuel, come down in price, they are still struggling to find demand as the world's major economies contract, and tis the season of industry consolidation.

British Airways on Tuesday said it's holding merger talks with Australian national carrier and fellow OneWorld alliance partner, Qantas Airways, in a deal that could combine two of the world's best-known international carriers.

British Airways, in a brief statement, said

In response to recent media speculation, British Airways Plc confirms that it is exploring a potential merger with Qantas Airways Limited via a dual-listed company structure.

The discussions between British Airways and Iberia are continuing.

There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate.

British Airways shares shot up 12.1% in London. Qantas shares ended 4.3% lower in Sydney.
Iberia shares added 5.3% in Madrid.

British Airway possessed a 25% stake in the early 1990s which it sold in 2004. The British Airways talks with Iberia have languished because of Iberia's concerns about the U.K. airline's pension liabilities.

British Airways has been a very busy airline lately. In addition to the Qantas and Iberia negotiations, it is seeking antitrust immunity, from U.S. and European regulators, on its proposed partnership with American Airlines for which it is seeking. A proposal vehemently opposed by arch rival Virgin Atlantic.

Virgin has a presence in Australia in the form of low cost carrier, Virgin Blue. It will be interesting to see how the rivalry will carry over down under.

Like in the United States, Australia limits foreign ownership of domestic carriers. But the BBC was reporting that that may change:

It [the merger statement] follows indications from the Australian government earlier in the day that it may be prepared to relax the rules on foreign ownership.

Under current Australian law, Qantas must be at least 51% Australian-owned.

Any individual foreign airline can only own up to 25% of it and only a total of 35% may be owned by foreign airlines.

Transport Minister Anthony Albanese proposed earlier on Tuesday that the rules be changed so that while 51% must still be Australian-owned, the remaining 49% may be owned by a single foreign airline.

The Australian government recently released a key industry blueprint that would cap foreign ownership at 49% in a bid to keep Singapore Airlines out of the lucrative U.S-to-Australia route.

The possible BA-Qantas link-up occurs as the industry consolidates. Delta has recently merged with Northwest, and on Monday, Ryanair Holdings launched a fresh offer for fellow Irish carrier Aer Lingus, which was rejected by the Aer Lingus board.

The Air France-KLM combine have shown the aviation industry how to combine functions while maintaining separate brands.