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. Last Updated: 07/27/2016

KLM, Alitalia Alliance

AMSTERDAM,Netherlands -- Dutch flag carrier KLM and Italy's Alitalia have unveiled long-awaited details of their tie-up, set to generate close to half a billion dollars annually in cost savings and other benefits.

KLM President Leo van Wijk said Friday that the 10-year pact - which will carry the slogan "The Alitalia-KLM Alliance: One Ticket to the World" - reached further than KLM's lucrative long-term tie with U.S. partner Northwest, which allows the two to operate as one on trans-Atlantic routes.

Under the agreement, the airlines will forge a full-fledged alliance in two phases. In the first phase, the two will cooperate on various passenger and cargo routes and in the second, set for completion next year, they will merge passenger and cargo operations in two separate ventures, splitting costs and revenues under a yet-to-be finalized formula.