Alan Joyce said the hurdles to the deal included BA's pension fund liabilities, the split in the merger ratio that would define each airlines' economic interest, and the current economic environment.

In his first public comments since taking the helm at the Australian carrier last month, Mr Joyce ruled out a three-way deal including Iberia, the Spanish airline that is simultaneously in talks with the British carrier. “BA and Iberia and us are all conscious that only one of the transactions can take place,” he said. “We are exploring a potential merger with British Airways via a dual-listed company structure. We are in these discussions because a merger has the potential to create the global scale that would allow us to grow and enhance our services, and deliver significant revenue and costs synergies,” Mr Joyce said