KLM Royal Dutch Airlines and British Airways (BA) say they expect to seal a short-term pact on routes this week aimed at limiting the damage they suffered after September 11th.
"We are engaged in talks with BA at this very moment. We are looking for short-term tactical cooperation," said KLM spokesman Mr Hugo Baas. "These are not negotiations leading to a merger".
British Airways, Europe's largest airline, said the agreement would probably be announced tomorrow or Wednesday.
"It will be on specific routes in the Middle East, although we don't know which routes yet, and we will do it for the summer of 2002," a BA spokeswoman said in London.
BA and KLM said in October they were discussing "limited short-term scheduling co-ordination", revolving around the sharing of route booking codes and selling of seats on each other's flights.
The airlines' shares showed little reaction. Midcap KLM had added 1.46 per cent by 10.15 a.m. after rallying over 7 per cent on Friday on better-than-expected December traffic data.
BA lost 2.4 percent after jumping 13 per cent Friday. The Dow Jones consumer cyclicals index was 0.15 per cent higher.
BA and KLM ended merger talks in September 2000 after months of tricky talks - the third time they had courted one another.