Delta Forms Venture With Air France
By 2010, the venture will expand to include all trans-Atlantic flights by both carriers, plus Los Angeles-Tahiti flights. Beyond a baseline formula, profits will be split equally.
In key ways, the joint venture resembles the 14-year-old alliance between KLM and Northwest (NWA). In both cases, antitrust immunity allows carriers to discuss fares, schedules and marketing. In 2004, Air France acquired KLM.
KLM and Northwest "have had incredible success," Hauenstein said. "But if [they] can make such a success of Detroit to Amsterdam, what kind of success can we have" on stronger routes like Atlanta and New York to Paris?
The venture enhances de Gaulle's potential as an alternative to congested Heathrow, where airline growth is severely limited. While Heathrow is a magnet for London business traffic, "we can take traffic that would flow through other hubs including Heathrow and move that onto Delta/Air France," Hauenstein said.This summer, Air France, KLM, Delta, Northwest and two other partners filed with the Transportation Department for shared immunity. Looking ahead, Delta said, approval could lead to a four-way joint venture agreement and, ultimately, the integration of trans-Atlantic operations.
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