Air France-KLM Merger Given Final Approval

Air France-KLM Merger Given Final Approval

In February, the European Commission and U.S. Department of Justice gave their approval to a merger, which will create the world’s third-largest airline.

Air France and Dutch airline KLM will operate as two carriers under a single holding.

“The outcome of this case shows that the long-awaited consolidation of the European airline sector can be done in full respect of competition rules. The merger between KLM and Air France will provide air passengers with a greater choice of destinations and services without having to pay a higher price on those routes where their presence is the strongest,” Competition Commissioner Mario Monti said in a statement.

Air France Chairman and Chief Executive Officer, Jean-Cyril Spinetta and KLM President and Chief Executive Officer, Leo van Wijk, both declared in a statement: “By [the EC] giving its clearance, the Commission has shown its commitment to the consolidation of our industry, whose current, highly fragmented organization is no longer adapted to the challenges of today’s world.”

In exchange for approval, the carriers will be required to surrender about 100 airport slots. Air France customers will gain 40 new routes with the merger, while KLM customers will gain 90 routes.

KLM now joins Air France and Alitalia as a member in the SkyTeam alliance.

Analysts predict that Alitalia may possibly merge with the new French-Dutch holding in the near future, but are divided over whether the move will lead to more mergers in the future.

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