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April 28, 1993|From Times Staff and Wire Reports

4 European Airlines Keen on Merger: A plan announced by four European airlines to create the biggest carrier in Europe appears increasingly feasible and would offer major profit gains, industry analysts said. After two months of studying an alliance, KLM Royal Dutch Airlines, Scandinavian Airlines System, Swissair and Austrian Airlines said they are keen to set up a new joint operating company by 1994. KLM, SAS and Swissair would probably each hold roughly 30% of the new company, with Austrian Airlines owning 10%, though this has yet to be finalized. Should official negotiations follow the endorsements of boards and owners, the airlines would seek to sign a memorandum of understanding by the end of June, SAS said. Working groups proposed that each airline should initially retain its current name but should have an additional common trademark. A combination of the four would create a giant. In 1991, they had combined sales of $13 billion and a 20% share of the European market. Their 270 aircraft would carry some 30 million passengers annually. KLM said last month that 1997 was a target date for integrating operations if the four agreed to go ahead. The merger would most directly threaten carriers based in nearby countries, such as Germany's Lufthansa and Air France, analysts said.

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