BA, KLM discuss merging

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This is a digitised version of an article from The Cayman Compass's print archive. Occasionally, the digitisation process introduces transcription errors, or other problems.

See the article in its original context from June 2000.

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Amsterdam (Reuters) British Airways Plc and KLM said Wednesday they were in talks aimed at a merger, opening the way to a major shakeup in a consolidating air industry. "KLM Royal Dutch Airlines and British Airways...have agreed to conduct talks on a possible combination of their businesses," said a statement from Europe's first and fourth-ranked carriers.

But the would-be partners, who tried unsuccessfully to merge eight years ago, warned that the discussions were preliminary and there was "no assurance" they would result in any deal. The consolidation bug is biting hard on both sides of the Atlantic, and a merged BA and KLM would create a potent grouping with a strong position on North Atlantic business routes.

BA is a partner of American Airlines, the world's second-largest airline, in the OneWorld alliance, while KLM has a close link with Northwest Airlines Corp, the number four U.S. carrier.

Although low-cost rivals were rattled by the announcement of dicussions between BA and KLM, German carrier Lufthansa AG said a BA/KLM merger would boost competition and would give it no reason to change its strategy of European partnerships.