Air France KLM and Delta launch Trans-Atlantic Global Joint Venture
The Air France KLM Group and Delta Air Lines today announced a new long-term joint venture whereby the partners will jointly operate their trans-Atlantic business by coordinating operations and sharing revenues and costs of their trans-Atlantic route network.
The airlines will cooperate on routes between North America and Africa, the Middle East and India, as well as on flights between Europe and several countries in Latin America. For customers, this joint venture will result in more choices, frequencies, convenient flight schedules and harmonized services on all trans-Atlantic flights operated by the partners.
The joint venture represents approximately 25 percent of total trans-Atlantic capacity with annual revenues estimated at more than US$12 billion (approximately 9.3 billion euros, reference year 2008/09).
"This strategic partnership puts us in a good position compared with other major alliances, which are extremely active on the world's leading long-haul market. By integrating our trans-Atlantic operations, we will give our passengers what they desire: more choice, more frequencies, more convenient flight schedules and superior customer service," said Pierre-Henri Gourgeon, president and CEO of Air France KLM. "By optimizing the use of our pooled resources, this joint venture will help us weather the current economic situation and protect our product offering."
The joint venture will also step up the visibility of all three airlines in more than 400 airports: the Air France, KLM and Delta brands will be combined at all North American and European airports wherever any of the three carriers operates. Moreover, each partner will also support the three brands in advertising and marketing. Governance of the joint venture will be equally shared between the Air France KLM Group and Delta. An executive committee comprising the three CEOs and a management committee comprising representatives from Marketing, Network, Sales, Alliances, Finance and Operations will define strategy. Ten working groups will be responsible for implementing and managing the agreement in the sectors of network, revenue management, sales, product, frequent flyer, advertising/brand, cargo, operations, IT and finance. The joint venture will not lead to the creation of a subsidiary. The venture is a long-term, evergreen arrangement that can only be cancelled with a three year notice, after an initial term of 10 years.