LONDON, England (CNN) -- British Airways said Tuesday it was in talks with Australian rival Qantas that could see a merger of two of the world's most prestigious airlines.
BA says it is in talks with Australian rival Qantas.
London-based BA said the exploratory talks would look at creating a dual-listed company but offered no other details.
"There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course if appropriate," BA said in a statement.
BA said the talks would not affect its negotiations in Spanish airline Iberia, with which it is already discussing a revenue deal with American Airlines.
Shares in BA leapt more than 10 percent on the news, soaring 154 pence ($2.32) within an hour.
Both Qantas -- known as the "Flying Kangaroo" airline -- and BA are partners in the Oneworld Global Alliance, an umbrella which links 10 of the world's carriers, including American Airlines and Cathay Pacific.
Tuesday's announcement comes after the Australian government revealed that it plans to increase the level of foreign ownership permitted in Qantas, the Sydney Morning Herald reported.
BA sold a remaining 18.25 percent stake in Qantas in 2004, according to the Herald.
The deal, which will not permit a takeover, revises current Australian law that currently limits a single foreign holding to 25 percent and a group maximum of 35 percent.
BA, American Airways and Iberia in August opened negotiations over a revenue deal, filing for antitrust immunity for the tie-up. The deal has been bitterly opposed by Richard Branson's Virgin Atlantic Airways.
CNN aviation correspondent Richard Quest said BA's twin merger situation was unprecedented in the aviation industry.
BA and Qantas have for many years co-operated on the so-called "Kangaroo Route" including sharing revenues on UK-Australia routes, Quest said. A merger would make a powerful airline that would literally span the globe, he said
The merger moves come during troubled times for BA, which saw its pretax profits fall by 92 percent in the first half of this year, a loss it blamed on high oil prices and troubled financial markets.
Qantas has also faced its own troubles this year after one of its jetliners was damaged by a midair explosion over the South China Sea in July, forcing it to make an emergency landing.
The airline also announced it was slashing its work force by 1,500 people worldwide, abandoning plans to hire 1,200 more as high fuel costs squeezed profits.