Air France and KLM end power struggle, agree to closer ties

PARIS (AP) — Air France and KLM have reached a compromise on tightening ties between the airlines, ending a power struggle that had alarmed the Dutch government, staff and shareholders.

Air France also secured a salary agreement with pilots after protracted conflict. The alliance said Wednesday that strikes shaved 335 million euros off last year's profits.

Details of the deals weren't released.

Air France-KLM Chief Financial Officer Frederic Gagey said the Air France-KLM plan involves better coordination and closer sharing of activities such as purchasing.

Gagey told reporters that the agreement allows Pieter Elbers to stay on as KLM's chief executive.

Air France-KLM CEO Benjamin Smith had reportedly pushed for an even closer alliance that Elbers opposed. That raised concerns in the Netherlands that Elbers would be pushed out and KLM's role diminished.