BSL

AMSTERDAM, Nov 3 (Reuters) - Dutch flag carrier KLM (NYSE:KLM - news) on
Wednesday said it saw further consolidation in the airline industry but remained tight-lipped
as to its own intentions.

``Consolidation is inevitable for our industry to improve our meagre margins, and alliances
are the way to get there,'' KLM Chairman Leo van Wijk told a news conference.

Last summer the airline unveiled a far-reaching alliance with Italy's Alitalia which took effect November 1.

U.S. carrier Continental Airlines (NYSE:CAL - news) is slated to join the tripartite alliance on transatlantic flights between
KLM and its current partners Alitalia and Northwest (NasdaqNM:NWAC - news).

The entry of the United States' fifth carrier has been pushed back because the necessary regulatory approvals blocks have not
yet been granted, Van Wijk said.

KLM is open for talks with Swissair and is still in joint venture negotiation with Norwegian carrier Braathens , in which it holds
a 30 percent stake.

Depending on the outcome of these talks, Braathens could be included in KLM's current alliance structure. The venture could
either include Braathen's entire route network or be limited to specific routes.

``It is clear that in the coming period, decisions will be made... we keep the door closed to nobody,'' Van Wijk said when
asked of the chances of a deal with Swissair.

Meanwhile, the high level of cooperation between KLM and Alitalia offered great potential for the two airlines, he said.

Alitalia and KLM have completely merged their cargo operations and do not exclude a full merger in the long run.

``We created an alliance framework which will deliver synergies that are out of reach for those who do not seek or have not yet
reached the level of integration that we have.''

KLM considers alliances the future but also tries to improve results in the shorter term, he said.