Air France, KLM to merge into Europe’s biggest airline

Air France and KLM, the Dutch air carrier, are shaping up a merger scheduled to see the light of days in just two weeks, a source close to Italian airline Alitalia informed. The alliance rekindles expectations on the creation of the largest airline ever in Europe.

According to the same source, Air France and Alitalia will also ink an agreement to put together a solid intercontinental carrier in the same period of time, a signal that the Italian company’s scrambling efforts to be a part of a European merger are eventually paying off.

“In a couple of weeks, Air France and KLM will trumpet the new agreement , while Alitalia should be closing in on a regional alliance with its French counterpart in terms of intercontinental routes. Air France and Alitalia will operate a single fleet of aircraft,” the source pointed out.

The new company –to be listed in stock exchange markets above the three national airlines- comes as the result of a research study conducted to join them together because they are partially state-run carriers that prefer to keep their original names intact.

Mergers of big airlines are penciled in as key to a sector that’s coping with a weakened economy and fiercer dog-eat-dog competition on the part of small-budget carriers like Ryanair.

Air France and Alitalia have had longstanding commercial ties and some common shares in stock markets. The values of the three European airlines soared over the past week in the face of the expectations raised toward an impending merger between at least two of them.

However, doubts over the way these airlines would come up with to keep their national identities took some wind out of the negotiations’ sails.

Would Alitalia –a company that has lately been plagued by heavy losses- be ruled out of a European merger, its tribulations could do nothing but accrue. The Italian company is determined to lay off 3,000 employees as part of its near-future streamlining plan.