The board of Air France is set to vote today on a tie-up with Dutch carrier KLM that could reshape the industry and lead to the first cross-border merger of leading European airlines.
Air France and KLM, Europe's second- and fourth-ranked carriers, have held alliance talks for over a year and appear on the verge of a deal many analysts view as an effective takeover of the Dutch airline by its bigger rival.
Under an agreement, whose details have been widely reported in recent weeks, the carriers would be placed under a common holding company, with Air France shareholders holding 80 to 85 per cent of the new company.
The airlines would retain their separate identities - a prerequisite for preserving their landing rights - and the Dutch government is expected to keep its golden share in KLM for now.
Still standing in the way of a deal is board approval from both airlines and a green light from the Dutch government - hurdles which make the timing of a final agreement uncertain.
The Air France board is scheduled to meet at 5 p.m. Irish time while KLM declined comment on whether it would also convene its board on Monday, but unions at both airlines see a deal as near.