EU 'to clear Air France-KLM merger Wednesday'

10th February 2004, Comments 0 comments

PARIS, Feb 10 (AFP) - Shares in Air France and KLM Royal Dutch Airlines jumped in afternoon trading Tuesday on growing signs they will soon gain conditional EU approval for their planned merger, dealers said.

PARIS, Feb 10 (AFP) - Shares in Air France and KLM Royal Dutch Airlines jumped in afternoon trading Tuesday on growing signs they will soon gain conditional EU approval for their planned merger, dealers said.

Air France shares were showing a gain of 5.6 percent at EUR 14.89 in mid afternoon trading here, while the CAC-40 index leading French shares was slightly lower.

In Amsterdam, KLM was up six percent to EUR 16.56 while the AEX index Dutch shares eased lower.

In October Air France and KLM signed an agreement that would create the world's biggest airline in terms of sales.

BNP Paribas Private Bank airline analyst Georges Skouvaklis said he expected the merger to gain EU approval by Wednesday, noting Air France appears to be willing to submit last-minute concessions aimed at securing an agreement.

"It looks like the airlines' merger will be approved tomorrow (Wednesday) and that Air France is ready to make concessions in order to avoid an (in-depth) probe by the EU," he said.

According to reports, both parties are still discussing fixed minimum prices for flights to the United States which the airlines want to impose on their routes but which the European Commission, the EU's executive arm, wants to remove to encourage competition.

The commission's competition department has until Wednesday to decide whether to clear or conditionally clear the merger, or whether to open an in-depth investigation which could last up to four months.

In Amsterdam, KLM spokesman Bart Koster declined to comment, saying the Dutch carrier has received no formal word from the EU on the matter.

© AFP

                                                              Subject: France news

 

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