British Airways chief executive Rod Eddington said that fundamental to the failure of the talks was that KLM appeared unhappy that BA, Europe`s largest airline, would control the merged entity.
It was our sense that they were uncomfortable that this would literally be a singe company and that we would have complete ownership and control, said Eddington, adding that KLM had made the initial merger approach to BA.
In a joint statement, the airlines said although they had made considerable progress since they began talks more than three months ago, they had not been unable to resolve financial, political and regulatory problems.
Although relations between the two parties remain amicable, we have had to decide to draw a line under these negotiations.
The two carriers had been facing several hurdles in the way of a deal, including competition concerns, strict regulations over international air rights, particularly in the United States, and price.
The two airlines had already started preliminary discussions with the European Commission over a possible deal.
But several European airlines had already lodged objections with the Commission and it was recently reported that the two carriers had not yet pinned down a price.
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