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Air France, Delta forming joint venture

Paris, Oct. 17, 2007 - Air France-KLM and Delta Air Lines Inc. are forming a joint venture that will allow them to share profits and up to an estimated US$8 billion in revenue on transatlantic routes.


October 17, 2007
By Carey Fredericks

The move announced Wednesday follows the new Open Skies agreement
on air traffic between the United States and Europe.

The joint venture will launch in April and have estimated annual revenue of $1.5 billion in its first phase and $8 billion in the second phase, the companies said in a statement.

It will cover nonstop flights operated by Air France-KLM and Delta between several European and U.S. hubs of the two carriers.

The announcement came the day after Delta reported a larger third-quarter profit and its chief executive said the carrier said a deal with another airline may be in its best interest.

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Many airlines are jockeying to take advantage of the Open Skies deal, which will allow airlines to fly from anywhere in the European Union to any point in the U.S. as of March 30.

Air France-KLM chief executive Jean-Cyril Spinetta has said the Open Skies agreement would allow Air France to offer flights out of London's Heathrow airport under its own flag, as well as new code-sharing agreements with Delta and KLM's partner airline Northwest Airlines Corp.

Air France is said to be interested in creating a new service between Heathrow and Los Angeles, while Delta is reported to be interested in flying to New York from Paris's Orly airport.

Air France and KLM combined three years ago, but both airlines are still being operated separately to retain landing slot privileges, notably at Heathrow where availability is extremely tight.