Air France expects combined annual revenues of $8 billion from a joint venture it announced with Delta Air Lines on Wednesday, in the biggest shake-up in the transatlantic market in years. They plan to share routes linking major US cities and Europe starting with London's Heathrow in a challenge to British Airways Plc and Richard Branson's Virgin Atlantic Airways - which immediately promised to defend itself.
The Air France and Delta venture is the biggest deal yet to follow a transatlantic Open Skies pact reached by the United States and the European Union and set to take effect next March. Other airlines are also expected to jockey for position at Heathrow, Europe's busiest airport.
For decades, US access to Heathrow has been limited to two US and two UK airlines - currently American and United, along with BA and Virgin Atlantic. By forming a joint venture, Air France and Delta will be able to share costs and revenues on transatlantic routes.
Air France and Delta said the first stage of the venture would cover all transatlantic flights between the Air France and Delta hub airports, as well as all flights operated by either carrier between Heathrow and the United States.
Air France will add a new Heathrow-Los Angeles flight and other routes from the London airport will include two to New York JFK and one to Atlanta operated by Delta. Air France will give up four of its 12 Heathrow slots now being used for flights to and from Paris to make way for the new transatlantic flights. Delta expects the deal to boost its pre-tax profit by $125 million to $200 million a year from 2011, Chief Executive Richard Anderson told a news conference in Paris.
Comments
Comments are closed.