Return
to Story Page
To print: Select File and then Print from your
browser's menu
Martha Brannigan &David Woodruff
Air France chose Delta Air Lines over Continental Airlines as its exclusive North American alliance partner, according to people familiar with the situation, a step that could shift the balance of power in the busy trans-Atlantic market.
The agreement is subject to Air France obtaining approval from its board next Tuesday, after which a formal announcement is planned.
The partnership, which was reported in the French economic newspaper Les Echos, lays the foundation for a major new global alliance and marks a much-needed break for Atlanta-based Delta, which has been stymied by a series of setbacks in its quest to expand its international reach through alliances.
The French carrier holds a strategic spot in the global-alliance landscape, because of its major presence in Europe, the Middle East and Africa. Particularly attractive to Delta is Air France's stronghold at Paris' Charles de Gaulle Airport, which is expected to add two new runways by 2001 and increase its aircraft capacity by 50 percent.
``It's a good fit,'' said Glenn Engel, an airline analyst with Goldman, Sachs & Co in New York. Charles de Gaulle Airport, he added, ``is a geographically well-situated hub airport with more room to expand capacity than other hubs in Europe.''
Delta, the No. 3 US carrier, and Air France are expected eventually to seek anti-trust immunity to share sensitive details on pricing and strategy. Such cooperation, however, wouldn't be permitted until the US and France reach an open-skies accord, a development that could be several years away unless Air France pushes its government to act sooner.
Together, Delta and Air France hold about 20 per cent of the trans-Atlantic market. The strength of pairing Air France and Delta, both of which have been also-rans in the alliance race until now, should make them more attractive in luring Asian and other carriers to the partnership -- a key part of their strategy. Major airlines are scrambling to stitch together global alliances as a way of increasing revenuewith a minimal capital investment.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------