F
R

8
-
2
0
0
0

SKYTEAM: NEW AIRLINE ALLIANCE FORMED

The existing global airline alliances face a new challenge: Aeromexico, Air France, Delta Air Lines and Korean Air have announced a new alliance of their own.

Unlike the aerospace industry, which is currently undergoing a spate of international mergers driven by the force of globalisation, airlines are pinning their hopes on alliances as a solution which circumvents the potential hurdles of antitrust legislation and leaves airlines with their identity intact. On 22 June the chief executives of Aeromexico, Air France, Delta Air Lines and Korean Air announced the formation of a new alliance to be known as SkyTeam at a press conference in New York (which was relayed by satellite to Paris). This might not be the first airline alliance but, according to Delta Air Lines chairman Leo Mullin, the four founding members intend it to be the longest lasting.

The new alliance will initially extend to codesharing of passenger and cargo flights. There are no plans at present to exchange shares in each other's companies. SkyTeam plans to make travel easier for passengers through convenient transfer connections and more non-stop flights. Customer loyalty to the SkyTeam airlines will be raised through reciprocal recognition of frequent flyer programmes.

Collectively the SkyTeam partners have a fleet of 985 aircraft, including six supersonic Concorde aircraft, and offer over 6,400 flights a day to more than 450 destinations.

As the individual companies are expanding their networks, the prospects for the long-term success of the alliance appear reasonable. The hubs of the four SkyTeam airlines are also well positioned: Air France's main hub Paris Charles de Gaulle is one of the few major international airports in Europe to offer scope for expansion. Delta Air Lines, with hubs in Atlanta, Cincinnati, Dallas Fort Worth and New York JFK, offers passengers a huge choice of transfer connections.

The four airlines see themselves as the core members of an expanding alliance. In Europe and the USA SkyTeam has a closely woven network, but in south America, south-east Asia, Australia and eastern Europe there are still large gaps. To realise their ambition of becoming one of the longest lasting airline alliances, SkyTeam will have to close these gaps. Negotiations are already under way with CSA Czech Airlines, which could join in March 2001.

From FLUG REVUE 8/2000, page 44