France 'backs' three-way airline tie-up

By Quentin Sommerville BBC business reporter in Brussels

A shake-up in the European airline business has moved a step closer after Italian carrier Alitalia said it had French government support for a link-up with Air France.

The French carrier is already in advance talks with Dutch airline KLM.

Only days after British Airways announced it was creating a partnership with Swiss Airlines, the boss of Alitalia says he has French government support to join a three-way tie-up with Air France and the Dutch carrier, KLM.

The merger would create one of the world's biggest airlines and already has the support of the Italian Prime Minister, Silvio Berlusconi.

He's determined that Italy won't be left on the sidelines of a consolidating European airline industry.

Job losses

All three national carriers have seen their profits collapse following the 11 September terror attacks.

A merger is viewed as the only way of guaranteeing their survival but it will also mean job losses.

The talks between Air France and KLM are well advanced. Both airlines are already in discussions with unions over the job implications of a merger.

A decision could be announced in a couple of weeks' time.