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It appears the talks collapsed because BA was seeking a 50-50 merger, while Qantas was insisting on a 55 per cent share in the combined business.
Julia Simpson, BA's communication director, commented: "We were clear from the outset that this had to be a merger of equals. We were not prepared to do a deal that was not in the interests of our shareholders, our customers and our employees."
Following news of the collapse of the merger talks, BA shares closed up 0.5p at 172.5p each.
Sydney's stock market had already closed, however Qantas shares had gained eight per cent earlier, reports the Times.
The collapse of talks could now mean a tie-up between BA and the Spanish carrier Iberia is back on the cards.
