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

The latest announcement comes at a time when many people's finances are shaky and demand for air travel has weakened. In Delta's case, it said in April that it will institute a $50 fee for most passengers to check a second bag on an international flight. The new checked bag fee is for travel beginning July 1. It also has plans to cut international capacity by 10 percent starting in September. And Delta has said it would ground 40 to 50 mainline aircraft and remove 30 regional jets from service.

The joint venture will help Delta and Air France-KLM weather the current economic situation and protect their product offerings, they said. The latest agreement means the airlines will equally share cost and revenues on certain flights regardless of what airline owns or flies the aircraft. That's different than a simple codesharing agreement where one airline bears all of the cost but another airline might get a share of the revenue for booking a customer on a flight.

Also, under the joint venture, sales teams don't have a preference of which airline's flight they book a customer on because the revenue and cost equation is the same whether it's operated by Delta or Air France-KLM, Delta spokeswoman Betsy Talton said. That won't apply for all flights, but will for those agreed upon as part of the joint venture.