Air France and KLM are continuing co-operation talks despite the fact that critical issues are yet to be resolved. While neither side was last week prepared to give details of the talks – KLM saying only that "there are no delays from our point of view; negotiations are still going on" - the Air France employees' union CGT says the problem is KLM's insistence on equal joint control with Air France, with a view to holding at least some power in a possible merged airline.

The airlines have agreed to set up a jointly owned holding company, which would have both carriers as subsidiaries. The deal would sidestep problems in integrating the companies' operations, but the ownership of the holding company remains an issue.

Source: Flight International