the obstacles in the way of a British Airways - KLM Royal
Dutch Airlines merger were insurmountable. The two carriers
issued a joint statement last week saying they will not
proceed any further on talks concerning combining their
BA and KLM
have been in merger discussions since June. The combined
airline would have been the third largest in the world and
the largest airline by far in Europe.
recognized that this would be a complex transaction, involving
not only commercial and economic issues, but also aeropolitical,
regulatory and other matters. Although we made considerable
progress, it has not been possible to resolve these," said
Rod Eddington, chief executive of British Airways, and Leo
van Wijk, chief executive of KLM.
relations between the two parties remain amicable, we have
had to decide to draw a line under these negotiations.''
have had their share of merger problems recently. BA has
maintained on-again/off-again talks with American Airlines
for years, although these have since cooled considerably,
and KLM's recent merger discussions with Alitalia were called
off last minute earlier this year.
the BA-KLM merger were the two carriers' existing relationships
with other US airlines. KLM has had a long-standing, and
regulatory approved, alliance with Northwest Airlines, while
BA and American remain partners in the oneworld alliance,
which formed last year.
partnership, however, has soured since BA announced its
talks with KLM. American has reportedly been shopping around
for other potential European alliances, with Qualiflyer
among the frontrunners.
to their merger difficulties, both BA and KLM have hit financial
skids this year, although the chief executives last week
made efforts to emphasize the positive going forward.
meantime, we will continue to take steps to improve the
performance of our company, through our fleet and network
strategy, through continued product improvement and by working
with our established alliance and franchise partners," BA's
Leo van Wijk
of KLM, said: "During
the discussions with British Airways, KLM has successfully
continued to focus on the development and the profitability
of the company. While we continue to believe that consolidation
in European aviation industry is inevitable, we at the same
time remain convinced that for the foreseeable future, KLM
has bright prospects on its own.
"We are well
positioned in Europe, are financially strong, and have a
profitable and growing business. Together with Northwest
Airlines, we have one of the most developed transatlantic
alliances," he added.
British Airways' chairman, agreed that European consolidation
is inevitable for the airline industry.
Airways still believes there must be consolidation in the
European airline industry. Europe is our backyard. We have
always been a leading player in this market, and we will
continue to look for opportunities to strengthen our position
in it,'' he said.