Air France-KLM, Delta Tie-up To Reap $12B Annually

GREG KELLER

ATLANTA (AP) — Delta Air Lines Inc., Air France and KLM signed a deal Wednesday to combine two separate joint venture agreements into one to create a trans-Atlantic powerhouse that's expected to generate $12 billion in annual revenue, provide better travel options for customers and more closely align the carriers' operations without a formal merger.

Passengers get more nonstop flights between major cities in the U.S. and Europe, while competition and the weak global economy will likely mean fares won't be affected too much.

The airlines aren't merging, and no subsidiary will be created, but airline consultant Darryl Jenkins said the equal sharing of revenue and costs regardless of who is flying the plane means the carriers will essentially act as one airline on certain routes.

"This is a very big deal," Jenkins said.

No new routes were announced beyond what the two previous agreements provided for separately.

KLM signed a joint venture agreement with Northwest Airlines in 1997, while Air France and Delta signed a joint venture agreement in 2007. Following Atlanta-based Delta's acquisition of Northwest in October 2008, the carriers decided to work on forming a single joint venture.