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Air France-KLM to take stake in US airline merger By Kevin Done in London, FT | February 16, 2008 Air France-KLM is planning to invest directly in the US airline industry for the first time by taking a minority stake in the group expected to be formed from a merger of Delta Air Lines and Northwest Airlines, the number three and five US carriers. Air France and Delta on the one hand and KLM and Northwest on the other already have antitrust immunity for their respective transatlantic joint ventures, and the four entities have also applied to the US authorities for antitrust immunity for a four-way transatlantic joint venture. Mr Gourgeon said the venture, which would have total revenues of $12bn, was 'of high strategic importance' and could be secured for years to come through a merger of Delta and Northwest. Air France-KLM is also eager to support the merger financially as a way of avoiding Delta moving to tie up with any other US airline, most probably United Airlines, with which it has also held talks on a possible merger. United is a leading member of the rival Star Alliance, which is led by Germany's Lufthansa. By taking a stake in a merged Delta/Northwest group, Air France-KLM would "secure for the very long term an activity [the transatlantic joint venture] that is still at the moment a bit at risk," said Mr Gourgeon. He added that if a Delta-Northwest deal were to be made, it would have to be agreed shortly. "Delta is putting pressure on the schedule, because it wants a quick agreement so that the present US administration can deal with the competition issues. That puts pressure on the timing," he said. In Europe, Air France-KLM is also studying a potential takeover of Alitalia. Mr Gourgeon said that any decision to make a binding bid for Alitalia was dependent on having full support from the Italian government and trade unions. Air France-KLM also announced operating profits up 23.4 per cent at euro311m ($455m) in the three months to December, in spite of strike action by cabin crew and some ground-handling staff that cost euro75m. Full coverage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||