KLM is seeking a full merger with another European airline, despite its "u"-turn on a deal with Alitalia. Dutch flag carrier KLM says it would accept a minority stake in a merged entity, suggesting it is prepared to combine with a larger rival.
KLM will not comment on speculation that it has reopened talks with British Airways, with which it once tried to agree terms.
"Our experience with Alitalia has strengthened us in our belief that the rationalisation needed in the airline industry can only be achieved through true mergers," says KLM chief executive Leo van Wijk. "Any other form of alliance that falls short of that is certainly not our primary objective."
Alitalia chairman Fausto Cereti, meanwhile, says his airline remains convinced that KLM is the best choice of partner. Speaking at the Economist Global Airlines conference in London, he said Alitalia would not hold talks with other likely allies until the European Union investigation into Milan Malpensa Airport has been concluded and the Italian Government has finalised the disposal of its remaining stake in Alitalia.
KLM is pondering its own strategy - which could see a link with one of several airlines, including Swissair - against a background of financial turmoil, with recent fuel price rises blamed for wiping out the carrier's profits (excluding extraordinary items) for the year to 31 March.
Van Wijk says current prospects are hard to judge due to fuel price uncertainties, but 1999 fourth quarter operating improvements, plus a cost savings plan, give cause for optimism. The quarter saw a 7% strengthening of yields due to increased demand on Asian and Atlantic routes.
KLM is to sell two Boeing 747-300s and aims to decide on fleet renewal by year end. One option is to replace Boeing 767-300ERs, MD-11s and remaining 747 Classics with a single aircraft family, with the Boeing 777 and Airbus A330/A340 under evaluation.
Source: Flight International
