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Report: BA, KLM to merge
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July 12, 2000: 8:20 p.m. ET
British Airways, KLM to submit merger proposal by early August
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NEW YORK (CNNfn) - British Airways and KLM Royal Dutch Airlines NV are planning to file a proposal for a full merger with European competition authorities by the first week of August, the Financial Times reported on Thursday.
Leo Van Wijk, chief executive of KLM, told the newspaper: "We are aiming for a full merger, that is the basis for our discussions."
He warned, however, that a merger deal could go ahead only if the British and U.S. governments could agree later this year on a liberalized "open skies" treaty, the newspaper said.
British Airways, currently the world's third largest airline, and Amsterdam-based KLM, Europe's fourth largest, announced on June 7 that they would discuss a possible "combination of their businesses," which industry sources said included the possibility of a full merger.
 The negotiations have been proceeding according to a loose eight-week timetable due to conclude around the end of July, at which time the two sides had hoped to strike a preliminary agreement or at least ascertain whether a deal could be done.
The combination could form Europe's largest and the world's second largest airline, boasting revenue of about $20 billion and some 600 aircraft.
Industry experts say British Airways is seeking to recover from losses inspired by intense competition in Europe and across the Atlantic as well as a series of labor disputes, which led to the ousting of chief executive Bob Ayling in March. Former Cathay Pacific boss Rod Eddington took over the post in May.
Shares of British Airways (BAB: Research, Estimates) were up 1-1/16 to 59-1/8 Wednesday on the New York Stock Exchange while shares of KLM (KLM: Research, Estimates) rose 1/16 to 27-1/16. 
-- from staff and wire reports
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