KLM ROYAL DUTCH AIRLINES AND AIR FRANCE TO CREATE EUROPE'S LEADING AIRLINE GROUP

Bangkok--Oct 1--Spark Communicaitons KLM and Air France yesterday announced that they expect to conclude an agreement that would lead to the creation of Europe's leading airline group through a share exchange offer by Air France for KLM common shares. The new group will be called Air France-KLM and will capitalize on two well-known brands, strong hubs and complementary networks. This major strategic step is unprecedented in the European airline industry and is expected to create substantial value for shareholders. The Boards of both companies believe that this proposed combination is in the interest of customers, shareholders and employees of both groups and represents a significant opportunity for further growth. Jean-Cyril Spinetta, Chairman and Chief Executive Officer of Air France, said: "We have always been convinced of the necessity of consolidation in the airline industry. We announced a combination with KLM that will create the first European airline group, which is a milestone in our industry. This will bring significant benefits to customers, shareholders and employees. Capitalizing on the two brands and on the complementary strengths of both companies, we should, within SkyTeam, be able to capture enhanced growth opportunities." Leo van Wijk, Pesident and Chief Executive Officer of KLM, said: "KLM has been pointing out the need for consolidation in light of the challenges facing our industry, and we have not made it a secret we were looking for a strong European partner. Through this innovative partnership with Air France and our subsequent expected participation in the SkyTeam alliance, we are confident that we have secured a sustainable future for our company. Our valuable Schiphol hub will be an integral part of the dual hub strategy of the new airline group, aloowing us to build on what KLM and its staff have achieved over nearly 85 years." The Supervisory Board and Board of Managing Directors of KLM have unanimously recommended the transaction. The Air France Board has authorized the Chairman and CEO of Air France, Jean-Cyril Spinetta, to sign the agreement enabling the implementation between the two airline companies. KLM and Air France expect to sign the transaction agreement within the next few weeks. For more information please contact Pannawat Khlongnakrob / Kannika Saiphan Spark Communicaitons Tel 0 2653 2717-9 Fax 0 2653 2725 Email [email protected] End. -RK-

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