| Journal: TWUK | Section: |
| Title: | Issue Date: 10/07/00 |
| Author: | Page Number: 45 |
| Copyright: Other |
In talks: BA and KLM’s merger discussions have left consumer associations feeling jittery but the trade is taking a wait-and-see approach to the news
SEAT-ONLY
The BA /KLM talks have ruffled consumer feathers.
Linsey McNeill reports
BRITISH Airways’ announcement that it is discussing a possible merger with Dutch carrier KLM seems to have caused more concern among those representing the travelling public than among the travel trade associations in the UK.Agents’ associations, including ABTA and the Guild of Business Travel Agents, have steered clear of any controversial comment on the issue, saying only that they cannot determine whether it will be good or bad for agents until they know exactly what the two airlines are proposing.
Neither carrier has confirmed whether it is a total merger or a simple co-operation deal that is on the cards, but whatever they are proposing is bound to have a significant impact on the travel trade.
A merger would create Europe’s biggest airline and the third largest carrier in the world. It would be worth around £5bn with more than 500 aircraft carrying close to 7% of all air passengers worldwide.
Such a powerful enterprise with such control over so many routes would be in a very strong position when negotiating contracts with travel agents.
Board director of ABTA’s aviation group Sandy MacPherson admitted this was a concern.
“There are pros and cons with a possible alliance and if there are likely to be advantages for passengers we would not frown on that. But we would want to look at the impact on agents in terms of remuneration,” he said.
But MacPherson said that ABTA would not react until it knew exactly what BA and KLM were proposing to do. “We are watching with interest,” he added.
The issue was on the agenda at the first official meeting between ABTA’s aviation group and BA’s new chief executive Rod Eddington two weeks ago but MacPherson said it was only “touched on”.
A spokesman for the GBTA said the association was reluctant to comment on the issue until it was sure what BA and KLM were suggesting.
The Air Transport Users’ Council, which represents the interests of air passengers, has more immediate reservations than ABTA and the GBTA.
An AUC spokesman said: “Nobody knows what is going to happen but if these two erstwhile competitors were to get together, we would have concerns about competition issues.
“We would want all the competition issues to be investigated by the relevant authorities before a merger or an alliance were to go ahead.”
The spokesman said the AUC was not worried about the impact on services between the Uk and the Netherlands because KLMalready had a monopoly on many of these routes but he said it was worried about the impact on the long-haul services operated by the two airlines.
In particular, the AUC is concerned there may be less choice if the two carriers rationalise their networks.
The spokesman said: “People living outside the southeast of England who want to travel long haul very often have a choice between travelling via London with BA or from their local airport with KLM via Amsterdam.
“They have a choice not only of convenience but also of product and of price and this choice may be restricted in the future if the two airlines got together. It could be that the cheap fares we can get at the moment for travel via Amsterdam may disappear.”
This should also be a concern for those agents outside the south east of England who sell a high proportion of long-haul flights via Amsterdam.
MacPherson added: “We recognise this is an issue but for the moment we will just wait and see whathappens.”