UPDATE: Air France-KLM In Big Transatlantic JV With Delta
May 20 2009 - 3:30AM
Dow Jones News
Franco-Dutch carrier Air France-KLM (AF.FR) has agreed to
jointly operate transatlantic routes, sharing revenue and costs for
at least 10 years with U.S. airline Delta Airlines Inc. (DAL).
The venture represents about 25% of the industry's total
transatlantic capacity and will sharpen the two airlines' ability
to compete against other airline alliances, the companies said in a
statement Wednesday. Based on 2008-2009 data, the annual joint
venture revenue is estimated at $12 billion, the companies
said.
The venture tightens Air France-KLM's links Delta, as they
already work together in the SkyTeam multi-carrier alliance. It
follows the merger last year of Delta and Northwest Airlines, which
created the largest U.S. carrier.
The Dutch arm of Air France-KLM has had a longtime partnership
with Northwest.
The new venture will run more than 200 transatlantic flights and
about 50,000 seats daily, the companies said.
Air France-KLM declined to say whether the number of flights or
seats available under the venture is an increase or reduction from
the current combined totals of the carriers.
The partnership encompasses all flights between North America
and Europe and extends outside the region to include routes between
Amsterdam and India, as well as North America and Tahiti. "On these
routes, strategies and economics are to be equally shared among the
Air France-KLM Group and Delta," the companies said, without
elaborating.
They added that the venture has no defined end date and can be
canceled with three years' notice after the initial 10-year
term.
"The signing of this joint venture agreement is taking place in
the wider context of the liberalization of air services between the
European Union and the U.S.," the companies said. It represents a
broad network of routes, new destinations, multiple flight
frequencies, a wider range of fares and a harmonized product in the
air and on the ground, they added.
Air France-KLM declined to comment further the statement until a
joint press conference with Delta at 1000 GMT.
Company Web sites: www.airfrance.com; www.delta.com.
-By A.H. Mooradian, Dow Jones Newswires; +33 1 4017 1740;
art.mooradian@dowjones.com.