24 May 2000

Following yesterday’s announcement of a 98% fall in pre-tax profits to only £5m ($7.5m) British Airways reversed its ‘no comment’ stance on reports that it is seeking a European partner – said to be Dutch national flag carrier KLM.

New BA chief executive Rod Eddington told a meeting with analysts: "There are significant changes in the European aviation landscape. These include consolidation. Europe is our backyard and is central to our alliance thinking."

But he still refused to reveal whether BA is mulling a bid for KLM, which is urgently in need of a new partner following last month’s collapse of its joint venture with Italian state airline Alitalia: "It would be unwise to speculate what we might or might not do, but getting the alliance part right is critical to our strategy," said Eddington.

KLM's divorce from Alitalia is expected to be finalised by August 31, the Dutch carrier revealed yesterday. This imminent deadline piles on the pressure to search for a new partner.

News source: Financial Times