SF Gate: EU to decide on KLM-Air France merger next week

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Friday, February 6, 2004 (AP)
EU to decide on KLM-Air France merger next week



   (02-06) 09:13 PST BRUSSELS, Belgium (AP) --
   The European Commission said Friday it would make its decision on the
proposed merger between Air France and KLM Royal Dutch Airlines by the
middle of next week.
   Commission spokeswoman Amelia Torres told reporters that European Union
antitrust investigators would likely make a decision by Wednesday, a
deadline the EU head office set, on whether to give the green light to the
linkup.
   Antitrust officials could also decide to open a further four month
investigation of the deal, however.
   "The Commission has not yet decided whether to give a green light or not=
,"
Torres told reporters. "The Commission welcomes the consolidation of the
airline sector of course, but the matter has not been fully investigated
yet ... you will hear the result next Wednesday."
   EU antitrust officials have already extended their deadline for two weeks
on the KLM-Air France deal, suggesting the two companies have offered new
concessions to get approval.
   When announcing the planned alliance last September, Air France chief
executive Jean-Cyril Spinetta indicated the carriers would have to cede
slots to rivals on the Amsterdam to Paris route, which they dominate, in
order to gain an antitrust clearance.
   The deal also has to overcome trans-Atlantic as well as European
obstacles, given KLM's alliance with Northwest Airlines Corp., based in
Eagan, Minn.
   Other concerns include KLM's plan to join the SkyTeam Alliance, led by A=
ir
France and U.S. carrier Delta Airlines. In the past, the Commission has
said it would have to renew scrutiny of SkyTeam if other airlines join.
   U.S. antitrust authorities are separately reviewing the merger. KLM filed
for U.S. approval on Jan. 12. The Department of Justice has 30 days to
make an initial response or extend its inquiry.

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Copyright 2004 AP

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