Qantas Airways Ltd and British Airways PLC are targeting annual synergies of at least US$500 million by 2010 as part of their merger discussions, the Australian Financial Review reported. Qantas Airways British Airways are in talks about a potential merger as airlines explore consolidation in a bid to mitigate the deepening economic downturn. Qantas confirmed on Wednesday it was exploring a potential merger via a dual-listed company structure after a similar announcement earlier by BA that sent the British company’s shares soaring in London trade. Chairman of the combined entity would rotate with Qantas chairman Leigh Clifford likely to take the inaugural role. A Qantas statement released in Sydney echoed BA’s assertion that there was no guarantee any transaction would be forthcoming and a further announcement would be made in due course, if appropriate. Meanwhile, BA also said its tie-up talks with Spanish airline Iberia were continuing. British Airways, Iberia and American Airlines (AA) signed an agreement in August to cooperate on flights between North America and Europe. Virgin Atlantic Airways, which has already objected to the BA-American-Iberia tie-up, said BA was attempting to increase its dominance to the detriment of competition.