BRITISH Airways (BA) said
yesterday it had ended talks on a possible takeover of KLM Royal Dutch Airlines after the two failed to agree on the structure of a joint airline.
BA chief executive Rod Eddington said that fundamental to the failure of the talks was that KLM appeared unhappy that BA, Europe's largest airline, would control the merged entity.
''It was our sense that they were uncomfortable that this would
literally be a single company and that we would have complete
ownership and control,'' said Eddington, adding that KLM had made the initial merger approach to BA.
In a joint statement, the airlines said although they had made considerable progress since they began talks more than three months ago, they had not been unable to resolve financial, political and regulatory problems.
The two carriers had been
facing several hurdles in the way of a deal, including competition concerns, strict regulations
over international air rights, particularly in the United States, and price.
The two airlines had already started preliminary discussions with the European Commission over a possible deal.
But several European airlines had already lodged objections with the Commission and a source said last week that the two carriers had not yet pinned down a price.
Eddington said the structural issue had loomed too large.
''On the basis that we were only interested in doing this deal if we could create one consolidated entity, price, at the end of the day, was not the issue.
''We were only interested in moving forward if we had complete confidence that we had complete control over the KLM of today,'' he added. - Reuters.
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