Global Traveler: Air France and Delta Air Lines recently initiated a fully integrated profit- and revenue-sharing transatlantic joint venture. How does it work?
Jean Claude Cros: In October 2007 Air France and Delta announced the formation of a joint venture agreement which will be implemented in two phases. The first phase started April 1 and includes all U.S. flights to/from London Heathrow and all hub-to-hub transatlantic flights between New York [JFK], Atlanta, Cincinnati, Salt Lake City, Paris [CDG and ORY] and Lyon. Phase two is scheduled to begin in April 2010 and will include all Air France- and Delta- operated flights between North America and Europe/Mediterranean markets.
This long-term agreement provides for the sharing of both costs and revenues. It includes the introduction of expanded code-share operations between most European markets and the United States as well as markets between France and the United States on which Air France and Delta currently have codeshares.
Management of the joint venture will be coordinated through a steering committee made up of executives from each carrier. Nonetheless, Air France and Delta will maintain individual and complementary branding.
GT:Will the joint venture provide a noticeable benefit to Air France and Delta customers?
JCC: This joint venture will not only benefit each airline in terms of operational results, but more importantly, the consumer will also benefit. Air France and Delta will be able to offer customers new routes, more flight options and frequency, better schedules and new opportunities to earn more miles.
As a result of this joint venture, the first flights that will be introduced this spring and summer are daily flights between Los Angeles and London [LHR] operated by Air France, and twice-daily flights between New York [JFK] and London [LHR] and daily flights between Atlanta and London [LHR] operated by Delta. Other flights to be added that are not currently served on a nonstop basis by either airline are Delta flights between New York [JFK] and Paris [ORY], New York [JFK] and Lyon, and Salt Lake City and Paris [CDG].
GT: Since both airlines are members of SkyTeam, will this also affect Continental and Northwest?
JCC: The joint venture only concerns Air France and Delta. No other member of SkyTeam is involved or included in the joint venture, and our relationship with other SkyTeam partners is unchanged.
GT: Since this is a fully integrated joint venture, is the next step a full-blown merger between the two airlines?
JCC: There are no plans to merge the two airlines.
GT: Many airlines are phasing out their first-class service while enhancing their business-class service and inaugurating a premium-economy service. Does Air France have plans to phase out L’Espace Premiere and replace it with an enhanced L’Espace Affaires service?
JCC: Air France has no plans to discontinue its L’Espace Premiere product. We believe that there is an important market segment that is looking for additional luxury, privacy and personalization when they travel. We also believe that this is a signature product for Air France — one that optimizes our philosophy of luxury and well-being when traveling, is synonymous with our brand, and one that we believe truly differentiates us from our competition.
Not only do we plan to maintain it, but, in fact, we have been investing significantly in the product with enhanced benefits and features. For example, at Paris CDG we have recently introduced new check-in and lounge facilities, a new partnership with the Hyatt Park Vendome hotel for catering at the lounge, and personalized transfer by private car from the lounge to the aircraft for all first-class passengers.
GT: Are there plans to make Air France’s premium-economy service, Alize, available on transatlantic flights between France and the United States?
JCC: We are constantly reviewing new opportunities to enhance the quality of the experience for our passengers. The Alize product has been quite successful on routes where we offer it, and it might give us some new ideas.
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