The AIR FRANCE KLM Group and DELTA AIR LINES signed a joint venture agreement on 20 May 2009, according to which the partners will jointly operate their trans-Atlantic routes, thereby sharing revenues and costs.
The new joint venture represents:
- around 25% of the total trans-Atlantic capacity,
- annual revenues estimated at 12 billion dollars,
- 200 daily trans-Atlantic flights offering customers some 50,000 seats daily.
The joint venture offers direct benefits to customers from Air France, KLM and DELTA with access to:
- a vast route network,
- new destinations,
- many more frequencies,
- a larger range of fares,
- harmonized ground and inflight services.
The geographic scope of the joint venture covers routes between North America and Europe, Amsterdam and India, as well as between North America and Tahiti. The strategies on these routes are closely coordinated, and the costs are equally shared between the AIR FRANCE KLM Group and DELTA.
The joint venture agreement is valid for an indefinite period of time. After ten years, the agreement may be terminated with a three-year notice.
The signature of this agreement takes place in the wider context of the liberalization of air services between the European Union and the United States, following the signing of an Open Skies Agreement.
And also:
- Hubs map
- Air France and KLM destinations
- Delta destinations
- The North Atlantic is among the largest long-haul world markets
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What is a joint venture (JV)?
A joint-venture (JV) does not refer to a specific legal structure under French law, but may be described as an agreement of cooperation between two or more companies, formed for a specific purpose.
There are two types of joint-venture: equity-based and contractual. The joint-venture agreement signed by Air France and Delta Air Lines is of the second type. This agreement of cooperation designates a partnership designed to share tasks, costs and revenue, without a financial stake. Each company participating in the JV assumes the same risks, obligations and investments, with as their ultimate goal that of optimizing profit.
An agreement, signed by all the relevant partners, stipulating the basic rules of the partnership, the objectives, the necessary resources and the duration of the partnership is the basis of a JV.
