Australian carrier Qantas Airways and British Airways have called off their merger talks because they cannot agree key terms, Qantas said on Thursday.

M&A banking next year will be more Accident and Emergency than Mergers and Acquisitions as companies slim down, banks pair up and the strong eat the weak.

UPDATE 1-BA signs agreement with American Airlines, Iberia

British Airways posted a fall of 88 percent in first quarter profit and said the trading environment was the worst the industry has ever faced as high oil prices, the economic slowdown and weak consumer confidence hit.

British Airways and Spain's Iberia are in talks to forge the latest in a series of European airline mergers that could also form the basis of a three-way transatlantic tie-up.

From job cuts to fewer winter flights, airlines are looking for every way to battle high oil prices.

British Airways is said to be close to seeking clearance from competition authorities for a three-way operational merger with American Airlines and Iberia, the Times of London and the Financial Times report.

Air France-KLM and three other airlines agreed to pay fines totaling $504 million to settle U.S. price-fixing charges involving vast shipments of consumer goods ranging from electronics to medicines, the Justice Department said Thursday.