KLM
and Air France today announced a deal which effectively sees Air France acquire
its smaller rival for £545.5 million.

The
deal creates a carrier with more than 100,000 employees, two large hubs, two
complementary networks, aggregated revenues of £13.3 billion and 226
destinations.

Despite
Air France being the dominant partner, both airlines will retain their national
identities, logos and brands.

Air
France chief executive Jean-Cyril Spinetta said the combined airlines could
save £417 million a year through sales, network and IT synergies. He described
reports of job losses as “absurd”.

His
KLM counterpart, Leo van Wilk, said: “Through this partnership and our
subsequent expected participation in the SkyTeam alliance, we are confident we
have secured a sustainable future for our company.” 

As
part of the deal KLM will become part of a significantly strengthened SkyTeam
alliance but will retain its deals with Northwest and Delta Airlines.

Current
KLM shareholders will own 19% of the company, the French state 44% and existing
Air France shareholders 37%.