KLM ROYAL DUTCH AIRLINES AND BRITISH AIRWAYS END TALKS

KLM and British Airways today announced that they will not be proceeding any further in their talks on a possible combination of their businesses.

Leo van Wijk, Chief Executive of KLM and Rod Eddington, Chief Executive of British Airways, said: “We have emphasised throughout that there was no assurance that our discussions would lead to a deal. We always recognised 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. Although relations between the two parties remain amicable, we have had to decide to draw a line under these negotiations”.

Leo van Wijk, Chief Executive 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”.

Rod Eddington, Chief Executive of British Airways added: “In the meantime, we will continue to take steps to improve the performance of the company, through our fleet and network strategy, through continued product improvement and by working with our established alliance and franchise partners”.

Lord Marshall, British Airways, Chairman, said: British 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.”