Air France KLM said it is looking at the possibility of a tie-up with Spanish airline Iberia.
Spanish publication El Economistaearlier said Air France KLM could team up with private equity company Apax in a consortium that was ready to bid €3.8 billion for Iberia.
Air France KLM, the world's biggest airline in terms of revenue, repeated it intended to play an active role in the consolidation of the airline industry.
British Airways, which owns around 10 per cent of Iberia, is in a consortium led by private equity company Texas Pacific Group (TPG) that has made a provisional offer for Iberia.
TPG has provisionally offered €3.60 a share for Iberia, valuing the Spanish carrier at around €3.4 billion. Iberia shares closed at €3.77 on Monday, while Air France KLM shares closed at €34.37, giving Air France KLM a stock market value of around €9.6 billion.