BA starts negotiations with KLM

[avt100]

It seems that BA starts negotiations with KLM again since the AA deal failed.

It was just on the Dutch Financial News, shares KLM are blowing sky high at the moment +6,4% this morning on the AEX exchange.

[sirwa69]

They have already started working together to help each other save costs in the Gulf

<a href="http://www.gulf-daily-news.com/arc_Articles.asp?Article=14237&Sn=BNEW&IssueID=24309" target="_blank">BA and KLM to share flights on Gulf routes </a>

Mind you, I think BA did better on this deal, they gained Oman and lost Dammam <img src="rolleyes.gif" border="0">

[Otterman]

I am not sure what to make of AA and BA calling off their deal. As has been suggested in another topic it might all be posturing for the final push. But KLM/BA isn’t an automatic alternative. The same things that seem to be the problem with AA/BA; slots and open skies, will be a problem with KLM/BA and the Wings alliance. The market share isn’t as dominating for KLM/BA/wings, but the other US carriers will be sure to force the Heathrow door open if KLM/BA want to seriously get together. Politics are way too involved to make the deal happen in my opinion, unless KLM is willing to sacrifice itself. I hope not, I like the spunky outfit out of Amsterdam.

[bjghi3]

It is my understanding that the recent, very limited code sharing deal announced by KL/BA is for 6 months. This was due to the very skeptical mind of KL executives and rightly so. They refuse to do anything that in any way would casue damage to the US/Netherlands Openskies and the accompaning US antitrust immunity with NW. KL has profited much too much from this arrangement. The word was that the lack of openskies between the US and UK was a very, very severe handicap for future codesharing etc. So now that the AA/BA deal is off, BA turns to KL but the overriding issue is still the same. Are they going to waste KL time and more govt. officials time expolirng or doing a merger only to have it fall apart at the last minute due to a lack of US/UK openskies?. .On teh other hand, there is far less overlap on the NW/BA and CO/BA routes in the US than there is on the AA/BA route structure in the US. This is a plus. AMS has tremendous growth potential, so it is possible that BA could shift flights there to free up space at LHR for a US/UK openskies. However, I still thin k that at some point in time, the UK is going to have to amke a "good faith" offer to partly increase US access at LHR. This would show the Dutch regulators, KL executives and the US that BA and UK are truly intent on opening up LHR.In the meantime the french and US have recently signed an openskies and DL/AF have US antitrust immunity. My feeling is that this, in the end, will put enormous pressure on BA to do something sooner, much sooner, rather than later. So indirectly, I think it is the US that has the deck of cards, not the british and LHR. This is all due to the recent developments in France. My guess is that something, even on a limnited scale will happen in time to cash in on summer, 2002.