The fourth-largest airline in Europe by passengers served, Air France-KLM (AFRAF) has merged the flagship carriers for France and the Netherlands back in 2004.
While less well known outside of the European continent, the wider airline group also owns the low-cost Dutch carrier Transavia. In 2024, the three airlines carried just under a combined 94 million passengers.
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‘The discussions that took place were very positive’: Air France CEO
While the three airlines under the Air France-KLM umbrella remained the same for nearly two decades, this could soon change as the parent company eyes the acquisition of the Portuguese flagship carrier TAP Air Portugal (commonly referred to as TAP).
On March 6, Air France-KLM CEO Ben Smith confirmed to investors that a merger with TAP is something the company would be open to in the right conditions. In the same earnings call, he reported fourth-quarter earnings of 396 million euros (roughly $427 million USD) which immediately sent shares up 20% to a five-year high.
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At its most recent earnings posted last November, TAP meanwhile reported a 35% drop in third-quartet profit to 118 million euros (roughly $127 million USD).
“The discussions that took place last week were very positive from a political point of view,” Smith said during the call. “There is a marked interest in this partnership to be put in place with the public announcements that have been made by President Macron along these lines.”
Smith also spoke of the many hurdles that still need to be crossed before such a deal gets closer to moving forward; he said that Air France-KLM has not yet presented the proposal to the European Commission, although some discussions around what the brand and route network could look like under new ownership have reportedly already been taking place with the Portuguese government.
TAP Air Portugal is in talks about a potential mer
Horacio Villalobos/Getty Images
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But with Portugal now facing a third election in as many years amid sagging confidence in current prime minister Luís Montenegro and his party, Smith also admitted that it is hard to plan long-term.
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“The fact that there could be a delay of six or 12 months doesn’t seem material to me, but we would like to have visibility as soon as possible,” Smith said further.
Over in the U.S., Alaska Airlines (ALK) ‘s acquisition of Hawaiian Airlines is the most high-profile airline merger to take place in the last year. The acquisition was formally completed in September 2024 at a deal valued at $1.9 billion or $18 per share.
As both airlines have strong brand recognition, they will continue to run under their separate names although Alaska is already at work streamlining its route network in order to connect travelers in smaller cities to non-mainlands parts of the U.S.
This merger was approved even after a federal judge killed JetBlue Airways (JBLU) plan to acquire rival low-cost airline Spirit Airlines (SAVE) over antitrust concerns in January 2024 — with both Alaska and Hawaiian serving much more specific markets, the judge that approved this deal was less swayed by concerns over killing competition.
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