Air France corporate : SkyTeam, 19% of global market share

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SkyTeam, 19% of global market share

how does it work ?

Code-sharing: how does it work?

The code-sharing system, a widespread practice in the air transport industry, is based on agreements that bind the various members of SkyTeam.

This practice consists in selling flights operated by other carriers under their own code (e.g. AF for Air France, KL for KLM, DL for Delta, AZ for Alitalia).

For SkyTeam members, apart from offering travelers more flights and destinations, the alliance is an effective way of maintaining or extending their networks and improving their profitability.

Given the increasingly integrated market, airlines need to propose a powerful, global offer for the transportation of both passengers and freight, in order to further develop their growth and profitability.

Air France, Aeromexico, Delta and Korean set up the SkyTeam Alliance in 2000. Today it comprises eleven members: Air France, Aeroflot, Aeromexico, Alitalia, China Southern Airlines, Continental, CSA Czech Airlines, Delta, KLM, Korean and Northwest. Seven years after being set up, SkyTeam holds 19% of market share, and is the second-ranking global alliance, slightly ahead of oneworld and just behind Star Alliance.

In 2007, three associate airlines have also joined SkyTeam as part of a reinforced cooperation program: Air Europa (Spain), Copa (Panama) and Kenya Airways.

The European, American and Asian partners pool their resources and use a system of code-sharing flights. Their aim is to develop their offer on the global market or, in the case of a difficult economic situation, to maintain services to all destinations on the Alliance network. In this case, the alliance would act as a buffer against external events.

With more than 16,000 daily flights to 841 worldwide destinations, SkyTeam offers a vast global network. This is organized around powerful hubs belonging to member airlines, which constitute the strength of the SkyTeam Alliance: for example, the Air France and KLM hubs at Paris-Charles de Gaulle and at Amsterdam-Schiphol, the Delta hub in Atlanta (the biggest in the world), the Korean Air hub in Seoul Incheon (state-of-the-art hub) or that of Aeromexico in Mexico City (leading Latin American hub).

Key Figures

427,6 million passengers carried in 2006

15,000

daily flights

744

destinations worldwide in 151 countries

focus

A simple system of governance for SkyTeam

SkyTeam is run by a Board and a Steering Committee. Decisions are taken on a consensus basis, except in a few specific cases. Each member takes an equal part in all discussions and decision-making.

The Governing Board:

consists of the CEOs, Executive Vice Presidents and Alliance Vice Presidents,
meets twice a year,
appoints the Chairman and Vice Chairman of the steering committee for a period of two years,
defines major policy guidelines.

The Steering Committee:

consists of Alliance Vice Presidents of member airlines,
meets four times a year,
implements the strategic decisions taken by the Board and ensures the proper internal operation of SkyTeam.

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