Dutch airline KLM told its labour leaders today it had not yet reached an alliance deal with Air France, but the French carrier's plans to meet its unions signalled that it may not be far off.
KLM union officials told reporters that chief executive Mr Leo van Wijk said during a three-hour meeting that several factors still stood in the way of an agreement with Air France.
The officials said Mr Van Wijk also discussed several scenarios for co-operation that have circulated in the media in the recent weeks, including the creation of a common holding company. They declined to elaborate.
"After what we've heard I think we'll have to wait at least for the rest of the week," said one KLM union source.
Separately, the Financial Timesnewspaper said the Dutch government was expected to give its blessing to a tie up today, removing a potential obstacle to the deal.
KLM's workers fear that by linking up with much larger Air France, the Dutch group may be forced to sacrifice jobs. The loss-making group is already planning to cut 4,500 jobs.
But one French labour leader said a pact - that many analysts believe would pave the way for a full merger to create Europe's largest airline - may be announced as soon as next week after Air France asked its works council to prepare for a meeting next Monday.
The partnership deal would shake up the airline industry, bringing together two of Europe's larger carriers and boosting the line-up of the SkyTeam marketing alliance, which could also soon include KLM's US partners Northwest and Continental.