Qantas has warned that merger talks with British Airways may fail because of the UK carrier's proposed tie-up with Spanish carrier Iberia.

"There is a reasonable chance that this might not go ahead," new Qantas CEO Alan Joyce told reporters on Monday, adding, "We still are in a position where we have significant hurdles to overcome,"

He also identified BA's current pension liabilities, which stand at around $2.2billion, as a possible hurdle for the talks.

Source: Routes News