KLM Response to American Deal


AMSTELVEEN, August 23, 2002 - KLM Royal Dutch Airlines has taken note of the signing of a 10-year commercial marketing agreement by Northwest Airlines, Continental Airlines, and Delta Air Lines, as was announced earlier today. KLM is not a party to this agreement, but has been regularly updated by its partner Northwest Airlines on the initiative.


KLM sees further consolidation within the airline industry as a logical development. The proposed tripartite agreement between Northwest, Continental and Delta is primarily fueled by the current state of the U.S. domestic market, but will also have a broader global impact. If the other cooperative ventures recently announced in the U.S. are indeed implemented, three major alliances will emerge in the U.S. KLM expects that Europe will, in due course, also see three major airline alliances emerging, and intends to play a significant role in one of these alliances, together with its existing partners. KLM regularly meets with other airlines, such as Air France, to this end.


The three U.S. carriers involved in this tripartite agreement have indicated that they wish to discuss transatlantic cooperation with their European partners. In light of the developments in the United States, there is increasing scope for cooperation between KLM and Air France in Europe. Air France is a respected fellow European airline, offering a top quality product to its customers.


Following the announcement of today, KLM will pursue its talks with Air France. At present, these talks have not yet taken the form of negotiations on a strategic alliance. With its current solid position, KLM will only decide on strategic cooperation within Europe once it has carefully assessed its options. KLM can make no further statements on specific content at present.


The proposed tripartite marketing agreement will have no effect on the transatlantic flights operated under the joint venture between KLM and Northwest, nor on the current KLM-Continental codesharing agreement.

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The proposed agreement between Northwest, Continental, and Delta will, among other things, have to be approved by the U.S. Department of Transportation before it can be implemented.

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