Air France and the Dutch airline KLM are reported to have agreed on the framework of an arrangement that would link the two through a common holding company.
Air France chief executive Jean-Cyril Spinetta told staff representatives that both airlines would retain their names and independent operating rights under the deal and that financial terms had yet to be finalised.
Spinetta told a works council yesterday afternoon that the two companies 'had agreed on the main principles' of a deal to create 'one group with two companies'.
The new group would be headed by the Air France boss, with both national airlines retaining their names and individual operating rights - negotiated by their respective governments with third countries.
A full merger or takeover between KLM and Air France would create the world's largest airline in terms of sales.
However, the two carriers have not yet agreed completely on their business links, according to reports.
