British Airways and Qantas have given up an attempt to merge, leaving the British carrier free to pursue a tie-up with Iberia.

The Australian and British airlines failed to agree on the most basic term of the merger: how to share ownership of the proposed combined business.

Qantas’s market valuation is higher than British Airways, implying that the Australian company’s shareholders should have owned most of the merged company.

Their decision to walk away from the talks does not mean that they cannot try again later, especially since they already have a close relationship. They run a joint service between their two countries, and British Airways used to be a major shareholder in Qantas.

But they can just as easily look elsewhere for partners. British Airways is already negotiating to combine with Iberia, and Qantas has said several times that it needs to merge with a foreign airline.

Quantas Airlines has put its first Airbus A380 into commercial service, becoming the third operator of the ultra-large type.

The Oneworld alliance carrier says its first commercial A380 flight departed Melbourne at 11:15 today and the aircraft is scheduled to land in Los Angeles at 07:30 where it will be met by dignitaries and celebrities.

Qantas took delivery of its first A380 last month and had been using it since then for staff training. Following the inauguration of Melbourne-Los Angeles services today, it will from 24 October operate the aircraft on some of its Sydney-Los Angeles services and from January will use it for some of its services to London via Singapore.

Australia’s flagship airline, Qantas, has received the first of 20 Airbus A380s on order, at a ceremony in Toulouse, France. The Rolls-Royce powered aircraft was handed over to Qantas Chief Executive Officer, Geoff Dixon and Qantas CEO-Designate, Alan Joyce by Tom Enders, Airbus President and CEO and John Leahy, Airbus Chief Operating Officer Customers.

Geoff Dixon said: “When we ordered our A380 in 2000, we said that in addition to giving us the opportunity to reinvent our product, this revolutionary new aircraft offered capacity and operating savings, as well as environmental improvements. Everything we have seen since our initial order has reinforced this view.”

Qantas’ A380 cabin was created by internationally renowned designer Marc Newson. Typically the A380 seats 525 passengers in three-classes, however Qantas’ cabin is extra spacious with 450 seats (14 First, 72 Business, 32 Premium Economy and 332 Economy).

“The A380 sets the standards for the 21st century, “ said Tom Enders. “More than 380 patents on board underline the aircraft’s leadership in eco-efficiency and innovation and will allow Qantas to continue to grow whilst reducing its impact on the environment. We appreciate Australia’s iconic airline sharing the A380 vision with us from the very beginning.”

Qantas was the first customer to conclude the signing of a contract for the A380. In November 2000, it ordered 12 A380s, marking the first time in the airline’s long history it had ordered Airbus aircraft. Qantas later increased its order for A380s to 20, and is now the second largest customer for the world’s most modern aircraft.

The four Rolls Royce Trent 900 engines will each deliver up to 72,000 lbs of thrust, contributing to the aircraft’s overall fuel efficiency of less than three litres of fuel per passenger per 100 kilometres.

Rolls-Royce Chairman Simon Robertson said: “We appreciate the opportunity once again to be an integral player in shaping the future success of Qantas, Australia’s iconic carrier and one of the world’s leading airlines. This occasion marks another milestone for the Trent 900, the market leading engine for the A380.”

The aircraft’s efficiency and advanced technologies result in higher operational flexibility and outstanding economics, with a range of more than 15,000 km and seat-mile costs 20 per cent lower than its closest competitor. The A380 also provides vital extra passenger capacity without increasing the number of flights.

Qantas’ A380 will stop-over in Singapore before arriving in Sydney on September 21st. Qantas’ first commercial A380 services will be launched on October 20th from Melbourne to Los Angeles, and on October 24th from Sydney to Los Angeles. Later Qantas will also fly the A380 to Singapore and London. Currently the Qantas group, including low-cost subsidiary Jetstar, has ordered a total of 110 aircraft directly from Airbus.