BA and KLM resume merger talks!!
10/06/01 05:28
LONDON (Reuters) - British Airways and KLM Royal Dutch Airlines NV have resumed talks on a five billion pound 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.