Qantas last week said it was in talks with the UK carrier about a potential merger that could create an $8 billion company.
"There is no guarantee that any transaction will be concluded," said Mr Joyce, who took over as head of the airline from Geoff Dixon.
"There are a number of significant matters that need to be resolved, including agreeing an appropriate merger ratio and resolving issues around BA's pension fund, and the broader economic outlook."
Mr Joyce, who was addressing a business lunch in Sydney, also said Qantas was coming to the negotiation table with a strong position.
"Qantas comes to these negotiations from a position of strength," he said.
"We will only proceed with this transaction if we are assured that it will maximise value for Qantas shareholders."
The talks are taking place against a backdrop of consolidation in the aviation industry, as airlines muscle up to battle softer economic conditions and still high fuel costs.
"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 cost synergies - all to the benefit of our customers, our employees and our shareholder," Mr Joyce said.
"Consolidation give airlines greater scale in what is a volatile and highly competition industry.
"The global competitive environment is getting tougher.
"I also want to stress that consolidation is just one of the items on our agenda and we will not allow the current discussions to distract us."
Qantas shares were up 14 cents to $2.36 at 1.14pm (AEDT).
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