KLM and Air France shake on the deal

Creating the world's largest airline, the two flag carriers first announced the coming together back in September.

The Commission has now approved the merger, but only after Air France and KLM agreed to surrender 94 take-off and landing slots per day to their rivals.

In 2002-2003 the combined turnover of the two airlines was some 19.17bn euros ($24.5bn; �13bn).

French dominance

"The outcome of this case shows that the long-awaited consolidation of the European airline sector can be done in full respect of the competition rules," said EU competition commissioner Mario Monti.

He added: "The merger between KLM and Air France will provide air passengers with a greater choice of destinations and services, without having to pay a higher price on those routes where their presence is the strongest."

Passengers are however unlikely to notice much difference as KLM and Air France will continue as separate operating companies with their own brand identities.

KLM and Air France will be placed under a new common holding company, after a share swap agreement that values the Dutch company at 784m euros and leaves Air France as the dominant partner.