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Sunday Times/BBC Reports KLM/BA 'talks'  
User currently offlineGo canada! From United Kingdom, joined Jun 2001, 2955 posts, RR: 11
Posted (13 years 3 months 1 week 6 days 6 hours ago) and read 1463 times:

The Sunday times has published an article stating that ba and KLM are looking to tie up a deal to create the worlds thrid largest airline...reports are now on the bbc website as well as many others...what does this mean for the euro aviation industry and can it pass through?

One less hurdle will be what to do with the two low cost airline, GO and Buzzs as gO is to be sold anyway. Another problem would be KLMuk and how this would fit in to the new structure, personally I think KLMuk would be sold...

anyway thoughts most welcome and heres the articles...


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BBc website Sunday, 10 June, 2001, 09:30 GMT 10:30 UK
KLM and BA 'resume merger talks'

Merger would create the world's third-biggest airline

British Airways and Dutch airline KLM have reportedly resumed talks on a £5bn merger that would create the world's third largest airline.
But KLM on Sunday said that they were just general discussions in response to an article in the Sunday Times.

"We're in general orientating discussions, nothing else... No negotiations are going on, no merger talks," a KLM spokesman told Reuters.

BA chief executive Rod Eddington and KLM president Leo van Wijk had met recently to renewed contacts, the spokesman confirmed.

The companies ended four months of merger negotiations without agreement last September, saying they had been unable to resolve a number of issues.

Just talking

The two executives had not specifically talked about a merger, but dealt with general matters such as the role of airlines in Europe and the single market, the KLM spokesman said.

But the two airlines now believe they can rapidly agree the financial details of a merger, the Sunday Times said, adding that the BA board discussed a deal at a meeting last Friday.

KLM said last month it had not held talks with other airlines recently about potential alliances and had no immediate plans to do so.

Past talks

The airlines announced last June that they were discussing a possible merger, but talks are thought to have halted over difficulties involving competition concerns and strict regulations over transatlantic flights.

They filed a draft merger proposal with the European Commission's competition authorities after entering into an exclusive negotiation agreement.

But problems in securing approval from the competition authorities, as well as the Dutch airline's fears that it would lose its national identity to the much bigger carrier, appeared to cause the talks to break down.

Complementary businesses

Had it gone ahead, the merger would have created the world's third-largest carrier, after United Airlines and American Airlines.

BA is fourth biggest in terms of passenger traffic, while KLM ranks twelfth.

Analysts had regarded the two airlines' businesses as complementary: BA has concentrated on high-paying passengers, while KLM has focused on transfer traffic from Europe.

The deal would have been an attractive option for BA, which has seen its profits slump with increased competition on transatlantic routes, from budget airlines and high fuel prices.

It would also have given BA access to KLM's strategic Amsterdam hub, which has more spare capacity than London's Heathrow.

BA and KLM had discussed a merger several years ago, but the deal collapsed when KLM demanded a near-equal partnership.

A possible deal between KLM and Alitalia also came to nothing.


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also in the australian

BA, KLM return to merger talks
From AFP in London
June 10, 2001
BRITISH Airways and Dutch carrier KLM have resumed talks on a merger that would create the world's third largest airline, reports say.

Rod Erdington, BA's chief executive, has resumed contacts in the past few weeks with KLM chairman Leo van Wijk, The Sunday Times newspaper reported.

Talks between the two companies about merging broke down in September last year after months of negotiations.

"We are in a preliminary discussion phase," the newspaper quoted a senior source at the British firm as saying.

"We still want to do the deal. Failure last time was not attributable to either party and relations are still very good."

"They (KLM) are the logical partners for us whenever consolidation is permitted within Europe. The chief executives have started to chat again."


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also from Reuters....

UPDATE 1-BA, KLM resume merger talks-paper
6/9/01 3:05 PM
Source: Reuters

(Adds comment from BA spokeswoman, background from third paragraph)

LONDON, June 9 (Reuters) - British Airways Plc and KLM Royal Dutch Airlines NV have resumed talks on a five billion pound ($6.91 billion) merger that would create the world's third-largest airline, the Sunday Times reported.

BA Chief Executive Rod Eddington has contacted KLM President Leo van Wijk to restart negotiations that broke down last September, the newspaper said.

"We are in a preliminary discussion phase," the newspaper quoted a senior company source as saying. "We still want to do the deal... They are the logical partners for us whenever consolidation is permitted within Europe."

A BA spokeswoman would not comment on the reported talks, but confirmed the company was still interested in principal in a merger with KLM.

"We said we are interested in consolidation in Europe," she said. "The problem last time was an aero-political problem. If these problems could be resolved to our satisfaction, to KLM's, to everyone else's, then yes, we would want to do it. But it didn't happen last time."

KLM said last month in had not held talks with other airlines recently about potential alliances and had no immediate plans to do so.

BA abandoned nearly four months of talks on a possible takeover of KLM last September after KLM balked at losing its national identity to the much bigger carrier.

But the two airlines now believe they can rapidly agree the financial details of a merger, the Sunday Times said, adding that the BA board discussed a deal at a meeting last Friday.

The main reason for the failure of the previous talks was rooted in a byzantine set of international treaties drawn up half a century ago to govern flying rights across borders.

If KLM fell under British control, it would lose its rights as a Dutch airline, including the freedom to unlimited access to cities in the lucrative U.S. market. The deal would have created a company worth $7 billion.

Copyright 2001, Reuters News Service








It is amazing what can be accomplised when nobody takes the credit
5 replies: All unread, jump to last
 
User currently offlineOO-VEG From Netherlands, joined Oct 2000, 1081 posts, RR: 1
Reply 1, posted (13 years 3 months 1 week 6 days 5 hours ago) and read 1428 times:

I was a bit suprised to see the 2 companies negotiating again. Although I don't think they will merger that soon. KLM is just very stubborn and does not want to be "swallowed" by BA. Somewhere KLM is right especially when you involve Northwest in the story and the extra slots at Schiphol KLM has to offer (LHR is getting pretty full).

However I would rather see KLM ending up with Alitalia although that chance is very very very small.


User currently offlineVoodoo From Niue, joined Mar 2001, 2074 posts, RR: 0
Reply 2, posted (13 years 3 months 1 week 6 days 3 hours ago) and read 1415 times:

These cross-border major mergers make the United-USAirways merger look easy! I don't see anything like this really happening for years to come.


` Yeaah! Baade 152! Trabi of the Sky! '
User currently offlineGo canada! From United Kingdom, joined Jun 2001, 2955 posts, RR: 11
Reply 3, posted (13 years 3 months 1 week 6 days 1 hour ago) and read 1396 times:

What would the KLm part be called, i mean it will need to show some independence, i think it will have a new, updated livery with the BA speedmark.

to be honest BA needs a partner who is well-respected and can make Ba larger and who isnt in an opposing alliance such as Star were lufthansa, sas and austrian all live.

I think we are going to hear more about this...



It is amazing what can be accomplised when nobody takes the credit
User currently offlineGo canada! From United Kingdom, joined Jun 2001, 2955 posts, RR: 11
Reply 4, posted (13 years 3 months 1 week 5 days 23 hours ago) and read 1379 times:

this story is growing...

BRITISH Airways has reopened talks with KLM, the Dutch peer it tried to take over in a £5bn deal last year. Weekend reports said chief executive Rod Eddington is seeking to resurrect the tie-up with his counterpart Leo van Wijk.


BA played down the reports but said it was still interested in principle in a merger. KLM confirmed the two chief executives had met but said they had held 'general orientating discussions...No negotiations are going on, no merger talks.'


The two abandoned tie-up talks last September after KLM baulked at losing its national identity to the much bigger BA. Latest reports suggest the two believe they can rapidly agree the financial details of a merger. A deal would give the enlarged group a second major travel hub in Europe at Amsterdam's Schiphol airport to add to BA's strong position at Heathrow. It would also create Europe's largest airline, and the third largest airline in the world.


Eddington is also heading to the US to hold talks with new transport secretary Norman Mineta and American Airlines chief executive Don Carty. The spokeswoman said BA was keen to continue to deepen its ties with American Airlines with a view to establishing an alliance.




© Associated Newspapers Ltd., 10 June 2001




It is amazing what can be accomplised when nobody takes the credit
User currently offlineGo canada! From United Kingdom, joined Jun 2001, 2955 posts, RR: 11
Reply 5, posted (13 years 3 months 1 week 5 days 4 hours ago) and read 1351 times:

what do people now think of this story?

Klm seems to be denying merger talks, yet the mood from the Brit press is that ba are pushing for it with a momentum now growing.....

i wonder how long before a proper company annoucement is made?



It is amazing what can be accomplised when nobody takes the credit
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