Delta and Air France KLM in a Joint Venture

Air France KLM and Delta Air Lines will jointly operate their transatlantic routes, sharing revenues and costs.

The joint venture includes all flights between North America and Europe, between Amsterdam and India as well as between North America and Tahiti. Air France KLM and Delta claim there will be greater benefit to their customers terms of access to a wider network of routes, new destinations, higher flight frequencies, a wider range of fares for passengers and a harmonized product both on board and in the airport.

The airlines anticipate offering more than 200 transatlantic flights. Air France KLM and Delta are members of the SkyTeam Alliance. This joint venture is aimed at competing with the other two major air alliances, Star Alliance and Oneworld. All told, it represents 25% of all transatlantic traffic. Annual revenues are estimated at $12 billion.

Air France KLM suffered it first full year loss since the two airline merged in its financial year 2008-2009. The operating loss was €129 million, compared to a €1.41 billion operating profit in 2007-2008. Pierre-Henri Gourgeon, airline CEO, explained, "The financial year 2008-09 was one of contrasting halves, with a resilient performance in the first half, wiped out by the full force of the economic crisis in the second. Business traffic and cargo were especially affected, leading to a decline in revenues which accelerated in the fourth quarter. The sharp decline in oil prices had a negative impact on the fuel bill in the second half, whereas our hedging policy had been efficient in the first half. In the face of these unprecedented conditions we moved rapidly to lower capacity, reinforce cost-saving measures, reduce our investments and unwind part of our fuel hedges.”

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