Hmmm...
Now, this is interesting. Delta Air Line announced
Wednesday it has signed a 50/50 cost- and revenue-sharing agreement
with Air France-KLM, to operate transatlantic flights under the
Open Skies agreement signed earlier this year between the US and
EU.
The joint-venture -- which will go into effect in April 2008,
the same time Open Skies takes hold -- will apply to all nonstop
flights between Air France's French hubs, and four Delta hubs in
the US, according to Dow Jones Newswires. The agreement will also
give Delta a foothold in the hotly-contested London-Heathrow
market, through its use of three Air France slots.
By 2010, the JV is expected to add flights between Europe, the
Mediterranean, and North America.
"When fully matured and fully operating, the joint venture will
encompass about $8 billion of annual top-line revenue jointly and
we believe the incremental opportunity could be somewhere around
$125 million to $200 million in incremental pretax benefit," Delta
CEO Richard Anderson said.
New routes under the agreement include LHR-LAX, operated by Air
France... as well as two LHR-JFK routes and a LHR-ATL flight, all
operated under the Delta banner. Delta will also operate three new
nonstop routes to France: Paris-Orly to JFK, Lyon-JFK, and
CDG-SLC.
The first phase of the agreement is expected to generate some
$1.5 billion in new revenue... adding to Delta's already impressive
numbers, as reported earlier this week by
ANN, as well as to Air France's bottom line.
"We are hoping for
several tens of millions (of euros) of profits" from the joint
venture, Air France-KLM CEO Jean-Cyril Spinetta said.
The agreement also further stokes numerous rumors regarding an
imminent Delta merger with Northwest Airlines. It's hard to ignore,
for example, that Northwest has its own cost- and- revenue-sharing
agreement with Air France-KLM... and that Anderson was once CEO of
Northwest.
One thing is certain: mergers are clearly on Anderson's mind. On
Tuesday, he told reporters "[w]e are evaluating the best path
forward for Delta," reports the Minneapolis
Star-Tribune. Anderson added "evolution toward a more
consolidated industry will continue" and a merger "could make sense
for Delta if it is done thoughtfully from a position of
strength."
Furthering adding to the intrigue is the fact Delta submitted a
plan to the US Department of Transportation in June, in hopes of
creating a four-way antitrust immunity agreement
between the carriers. The airlines are already members
of the 'SkyTeam' alliance.
For now, though, Delta would like the focus to be on new travel
opportunities for its customers.
"When you hook up those two together and you look at all the new
city pairs around the world, don't just think of it as nonstop
between two points," Anderson said. "You're actually connecting two
global networks to create the world's largest global network."
Stay tuned.
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