British Airways and KLM Reactivate Partnership Discussions

22 October 2001

Following merger talks aborted over a year ago, the current crisis in the global airlines industry has refocused the minds of two major European carriers, British Airways and KLM, on the benefits of cooperation.

Executives of both airlines deny, however, that full merger is on their current agenda. Instead, they are concentrating on a shared reservations system and coordinated flight schedules.

The duo are also conducting soundings with other carriers on both sides of the Atlantic, according to KLM spokesperson Bart Koster: “We are looking into ways to survive, including cooperation with other airlines to see where we can reduce costs and improve revenue.”

Rod Eddington, BA’s chief executive went much further. Speaking on Sunday to BBC Television, he predicted a wave of consolidation that would see European airlines reduce in number from fifteen major carriers to three. “We want and believe that European aviation has to consolidate,” he evangelized.

Meantime, the crisis has brought a new lease of life to the protracted ‘open skies’ talks between the UK and USA, stalled for many years on the vexed question of the number of US airlines granted landing/take-off slots at London’s Heathrow Airport – currently confined to just two: American Airlines and United Airlines.

The increase of this quota is the quid pro quo demanded by the US government for granting antitrust immunity to British Airways’ long-sought partnership with American Airlines.

News source: New York Times