British Airways plans code-sharing with rival KLM

LONDON - British Airways PLC and KLM Royal Dutch Airlines NV, rivals who have been rumored as possible merger partners, plan to sell seats on one another&#39;s flights to the Middle East. <br> <br> The airlines aim to save money with a so-called code-sharing arrangement, which they expect to announce formally later this week, British Airways said Monday. <br> <br> Both BA and KLM are struggling to recover from a sharp drop in business after the Sept. 11 terror attacks on the United States. The pair have also suffered, like many other long-haul carriers, from the global economic downturn. <br> <br> Under their code-sharing deal, the airlines would cooperate on flights to several destinations in the Middle East during the summer season, KLM spokesman Bart Koster said in Amsterdam. Koster described the deal with BA as a &#34;limited tactical agreement&#34; and noted that it would conform with European Commission regulations. <br> <br> KLM announced earlier a six-month code-sharing agreement with U.S. carrier Continental Airlines Inc., while BA continues to push for its own trans-Atlantic alliance with American Airlines. <br> <br> The crisis in the airline industry has led to speculation that the code-sharing pact could be a first step toward a merger of BA and KLM. Both have cut jobs and routes in recent months, and BA has reported a decline in the number of passengers on its flights to the Middle East and Africa during December. <br> <br> However, BA denied that it was in merger talks with its Dutch counterpart. <br> <br> The two have discussed possible mergers in the past. Their most recent effort collapsed in September 2000. BA and KLM blamed intractable commercial and regulatory issues and said at the time that their relations remained amicable. <br> <br> A previous merger attempt in the early 1990s broke down over differences on how to value the two airlines. <br> <br> <br>

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