KLM, BA deny merger talks

June 10, 2001
Web posted at: 1443 GMT

LONDON (CNN) -- KLM Royal Dutch Airlines and British Airways have denied newspaper reports they have resumed talks on a possible merger.

Britain's Sunday Times newspaper earlier reported the pair had reopened negotiations on a £5 billion ($7 billion)deal that would create the world's third-biggest airline.

The talks had been abandoned last year. Executives from both companies denied the report.

KLM spokesman Hugo Baas told the Reuters news agency: "We're in general orientating discussions, nothing else.

"No negotiations are going on. There are no merger talks."

He confirmed that BA Chief Executive Rod Eddington had met KLM's head Leo van Wijk, but said Wijk had reported the talks were general in nature, including the role of airlines in Europe and the single market.

A spokeswoman for British Airways also said the chief executives had held talks, but denied they discussed a merger.

The Sunday Times had reported the two companies believe they can speedily reach agreement on the financial details of a merger.

It also said the BA board had discussed the deal on Friday.

The newspaper quoted a sourced as saying: "We are in a preliminary discussion phase. We want to do a deal. They are logical partners for us whenever consolidation is permitted within Europe.

Four months of talks between the two airlines were broken off last September amid KLM's fears that it could lose its national identity to the much larger carrier.

Under international treaties, KLM could lose its rights as a Dutch airline if it came under British control, denying it unlimited access to cities in the lucrative U.S. market.

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