Confirmation of an historic tie-up between two of Europe’s leading airlines, Air France and Dutch carrier KLM, may come this week if last minute details can be agreed.
The Air France board is due to meet on Monday afternoon and industry observers say there could be an announcement early this week.
The two carriers said last week that negotiations were at an advanced stage but that a number of issues were still to be resolved. The two airlines are understood to be considering the formation of a common holding company.
In addition to the boards of the two companies, any final deal will need the approval of the Dutch government. The state holds a “golden share” in KLM which allows it to limit the size of investments by other parties.
If the trans-national alliance goes ahead, Air France is expected to take a major stake in the new company, although both carriers would still fly under their own banners.
Air France is Europe’s second largest airline with the smaller KLM ranked at number four.
One of the issues which may influence an agreement is the role of Italy’s flag carrier Alitalia. The airline has made it clear it is interested in being part of any tie-up between the French and Dutch carriers.
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By: tenthije - 29th September 2003 at 19:20
BREAKING NEWS
From the Dutch NOS news!
Officials from the French unions are reporting that there will indeed be a holding of AF/KLM. This will be officially announced at 07:00 tomorrow morning! Of course the big shots at KLM and AF are keeping quiet! (leading me back to my previous post and the strength of AF unions)
Guarantees for both KLM’s and Schiphol’s existence have been made for at least 8 years!
By: tenthije - 29th September 2003 at 18:40
Originally posted by Saab 2000
But what is this exactly, is it a takeover or an alliance between three airlines?
From what I read in the local papers and hear on the news it will be a take-over in disguise. Of course this is all as un-official as could be! What happens is this (allegedly!)
A new HOLDING company will be formed supposedly to be called KL-France. They will hold all the shares of KLM and AF (And perhaps AZ? No mention of them!).
This holding company will be owned by KLM and AF. The shares will be split up according to size so this would mean that KLM get roughly 33% and AF get roughly 66%, assuming AZ won’t join the party (yet)!
Alsmost forgot: the Dutch government apparently will maintain 14%(?) percent of the shares of KLM. THis will give them a GOLDEN vote! As such anything drastic that could interfere with the future of either KLM or Schiphol could be vetoed. THis however is not much of a concelation to many KLM’ers, as Fokker is still very much in mind! I believe Daimler/DASA made roughly the same construction as AF does now!
By: tenthije - 29th September 2003 at 18:34
It certainly seems to be near. The Dutch government has OK’ed it and the French government sure ain’t gonna mind AF taking over a profitable airline. Apparently Berlusconi also wants a share of the honour (surprise surprise) and wants AZ to have a say as well.
Dutch unions are not thrilled at the idea and that is probably what is keeping it up. The government also wants some guarantees I believe. Mostly relating to employment and the future of Schiphol as a main hub.
If this deals goes through there will be some interesting questions:
* Ownership: will KLM still be KLM, or AF-Nord? Can KLM still make important decissions?
* Airports: Will AF, being the largest of the two/three, try to get all long-haul (=profitable) flights at CDG leaving AMS and Malpensa with the undesirable lot? This is a serious fear here!
* Corporate culture: the French are a bunch of strikers whereas the Dutch are a bunch of talkers (taking it very roughly, don’t be insulted please).
* Unions: in France the unions are extremely strong and powerful (see strikes) whereas the Dutch ones are a bit more tempered.
* Fleet: AF and AZ are big users of the A320series. AZ will replace their MD-80s in a few years and will likely get additional Airbusses. Where does that leave KLM/HV with the comparatively small B737NG fleet?
* Livery: Will there be a (special) SKYteam livery like with the STAR alliance?
Its gonna be interesting to see what will happen. One local paper (Metro I believe) has written a very small editorial in the finance section and they seem to think the announcement could be made tomorrow!
By: Saab 2000 - 29th September 2003 at 18:31
So we might finally see a decision from KLM 😮
I don’t particularly agree with the AF/KL link up, as I believe AF will just kill Amsterdam as a hub and KLM as an airline. But what is this exactly, is it a takeover or an alliance between three airlines?
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September 29, 2003 at 5:10 pm