Dutch airline KLM has denied a media report it has decided to link up with the SkyTeam alliance of Air France instead of the "Oneworld" grouping of British Airways.
Citing unnamed sources, German weekly news magazine Der Spiegelsaid KLM had decided against an alliance with British Airways .
The German paper said KLM and Air France had set up a team of experts from both airlines to look into possible cost savings from the co-ordination of flight routes and a partial merger of ground handling as well as the joint purchase of aircrafts.
KLM, Europe's fourth-largest airline, is negotiating an alliance deal as this is crucial for its economic survival. An alliance brings key cost advantages and network connections that are important in the increasingly competitive and liberalised aviation markets.
The lack of a clear alliance partnership is a big factor behind the financial problems of Swissair's successor airline Swiss International.
KLM, like Swissair, had tried to build up its own alliance and has a stake in Northwest Airlines. KLM's several past attempts to link with BA had also failed.