- (AFP) -- Air France and KLM announced Tuesday they were
prepared to join forces, with the French carrier effectively taking over
the Dutch company to form Europe's largest airline and one of the world's
biggest carriers.
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- Italy's national carrier meanwhile said it could join
the new alliance, and the Dutch government gave the deal its green light.
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- The proposed share-swap deal would see the creation of
a new holding company, Air France-KLM, which would maintain the two companies'
brands, hubs and networks, the airlines said in a joint statement issued
in Paris and Amsterdam.
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- The Italian national airline Alitalia, already a shareholding
partner of Air France, said it was interested in joining the new company.
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- Alitalia, Air France and KLM have also signed a three-way
accord that paves the way towards merging their cargo operations, said
Air France chairman Jean-Cyril Spinetta.
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- Spinetta, who is to be head of the new joint group, said
in Amsterdam that the new deal would not mean any job cuts at Air France.
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- "Maybe we will have to restructure, certainly we
have (to), but we have no layoff plan," he said.
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- The planned deal between Air France and KLM means a de
facto privatisation of the French carrier, in which the government holds
a 54-percent stake. The French state's share would drop to 44 percent once
the agreement is complete.
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- "Air France and KLM today announce that they expect
to conclude an agreement that would lead to the creation of Europes leading
airline group through a share exchange offer by Air France for KLM common
shares," the companies said.
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- Combined sales of the new entity would be 19.2 billion
euros. The deal values KLM at 784 million euros (911 million dollars).
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- Spinetta said in Amsterdam that KLM's "automatic"
entry into the Skyteam code-sharing alliance would help make that group
a world leader with Star Alliance.
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- "Supposing that (KLM's US partners) Northwest and
Continental follow, our alliance will become a world leader with Star,"
which was built around German rival Lufthansa, he added.
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- In addition to Air France and Alitalia, Skyteam already
includes Delta Airlines, Aeromexico, CSA Czech Airlines and Korean Air.
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- KLM, which has been struggling to find a European partner
for many years, has seen its sales and share price drop substantially in
the past two years due to a worldwide downturn in the aviation industry,
caused partly by the attacks of September 11, 2001 in the United States.
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- Approval of the Air France-KLM alliance depended on the
Dutch government, which owns 14.1 percent of KLM and is the majority owner
of Schiphol airport, vital to the Dutch airline and also to the national
economy.
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- The Dutch authorities were worried Schiphol might lose
business under the new arrangements, with Dutch Prime Minister Jan-Peter
Balkenende saying Friday this was a key issue.
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- On Tuesday, the Dutch transport ministry said it had
done its best to defend Dutch interests during the talks.
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- "The state was actively involved in the negotiations
and did its utmost to protect the general interest," it said in a
statement.
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- KLM shares shot up by 15.72 percent to 13.84 euros in
late morning trade on the Amsterdam stock exchange, while Air France shares
fell by 5.41 percent to 12.95 euros in Paris.
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- KLM chief Leo van Wijk said "through this innovative
partnership with Air France and our subsequent expected participation in
the SkyTeam alliance, we are confident that we have secured a sustainable
future for our company."
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- The new company would be controlled 81 percent by French
interests -- a combination of the government and the airline -- and 19
percent by KLM.
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- If Alitalia were to join the new company, it would only
occur after privatisation of the Italian carrier, which is 62.39-percent
controlled by the Italian state.
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