I am curious what others on our YEG Forum may see as the impact that the SkyTeam alliance Transatlantic Alliance from Europe to the USA may have on Canada and
YEG more specifically. Also, as Martinair will be 100% owned by KLM (Owners now supp[ort sale of all assets to KLM) and the new Martinair CEO/President is the former head of Marketing from KLM (August 22/07 appointment).
http://www.thetransnational.travel/news.php?cid=airline-alliances-transatlantic.Aug-07.22
Air Alliances Maneuver for Transatlantic Positioning
by David Jonas
22 August 2007 - Several requests by U.S. airlines and their overseas partners to further integrate operations are pending at the U.S. Department of Transportation. Along with objections filed by competitors, the applications reflect the intense maneuvering now underway in the transatlantic market as the United States and Europe prepare for the March 2008 activation of a liberalized aviation agreement. Members of each of the three leading airline alliances--Oneworld,
SkyTeam and Star Alliance--as well as codeshare partners Continental Airlines and Virgin Atlantic Airways, await word from DOT regarding their intentions to more closely align sales, strategies and schedules. Representatives of each partnership have long insisted that such coordination can benefit their multinational corporate clients.
First submitted in June, the
SkyTeam application requests antitrust immunity between
Air France, Alitalia, CSA Czech Airlines, Delta Air Lines,
KLM Royal Dutch Airlines and Northwest Airlines, as well as "
a joint venture agreement between Air France, Delta, KLM and Northwest that would create a comprehensive and integrated partnership." SkyTeam has collected support from several circles, including travel management professionals and other executives among Northwest Airlines' corporate clients. Representatives from BASF Corp., Cardinal Health, CH2M Hill, Dow Chemical Company, Goodyear, Harman International, ICG Commerce, Jeld-wen, Johnson Controls, Textron and Volkswagen were among the dozens of clients who each signed a form letter submitted to DOT, stating, "We welcome the enhanced transatlantic service and competition Northwest and its SkyTeam partners would create with their expanded alliance." In his filing to DOT, American Standard Companies global strategic sourcing director Thomas Barrett suggested that further SkyTeam integration "would offer substantial advantages to business travelers [and] consumers including improved flight schedules, reduced travel times, new service and lower fares." Barrett noted that Northwest is the "No. 1 most utilized carrier" for his company's managed travel program, which serves more than 10,000 travelers. To "remain competitive with other transatlantic alliances," Oneworld partners American Airlines, Iberia, Finnair, Malev Hungarian Airlines and Royal Jordanian Airlines also applied to DOT for antitrust immunity. The application covers code sharing, revenue sharing, pricing, distribution systems, route planning and other areas. Already part of an immunized bilateral pact with Finnair, American suggested in its initial DOT filing that Iberia, Finnair, Malev and Royal Jordanian consider a multilateral alliance "essential to their long-term competitive viability under applicable open skies regimes." "The combined market shares of American and the other joint applicants are comparable to, or well below, the transatlantic market shares enjoyed by members of the immunized Star and SkyTeam alliances," American explained. According to one of AA's filings, SkyTeam's Delta Air Lines had the largest passenger share between the United States and Europe, 11.9 percent, for the 12 months through April 2007. It was followed by Oneworld's British Airways (11.1 percent), Star's United Airlines (10.8 percent) and Lufthansa (9 percent), and American (8.8 percent). "Our argument has consistently been that while antitrust immunity and open skies agreements have the potential to benefit consumers, those benefits will not be fully passed on to consumers until there is more than an immunized global alliance duopoly between Star and SkyTeam," according to a subsequent AA filing. Yet, Oneworld's European anchor British Airways was not included in the immunity request. AA and BA have tried on several occasions to win ATI approval from DOT, but were not willing to pay the price: surrendering hundreds of landing and departure slots at London Heathrow Airport. Meanwhile, although SkyTeam member Continental Airlines was not included in the alliance's latest ATI request, and Virgin Atlantic does not participate in any global partnership, the two carriers in July asked DOT to extend bilateral rights for their marketing agreement. Specifically, they requested renewal of existing authority to share codes on certain transatlantic services, as well as certain flights beyond each carrier's gateway airports. The airlines said such authority would otherwise expire on 21 September 2007. In a more contentious request, the carriers asked for approval to place Continental's code on Virgin's Chicago-London Heathrow service, effective this week. Noting that Continental already shares codes on Virgin's Heathrow service to Los Angeles, Miami, New York JFK, Newark, San Francisco and Washington, US Airways urged DOT to deny the Chicago-London request: "Granting Continental further Heathrow authority beyond the scope of its present holding ... would only serve to widen the inequity between carriers with access to the critical London Heathrow market and its consumers, and carriers that remain completely shut out." United Airlines lodged a similar objection, but asked DOT to allow it to share codes with Star partner bmi between Heathrow and the United States, should Continental and Virgin win approval for their expanded codeshare request. Separately, bmi and United Airlines also asked DOT to remove conditions on their antitrust immunity and allow it to take effect in March 2008, given the completion of Open Skies negotiations. Of the three key alliances, Star already enjoys the deepest degree of immunity between members. As always, Heathrow remains the focal point of new transatlantic competition. Though the new Open Skies agreement ostensibly opens the airport to additional airlines interested in serving routes to and from the United States--beyond incumbents AA, BA, Virgin and United--the practical matter of obtaining slots has set off a new wave of jockeying among alliances. Air France-KLM, for example, reportedly has agreed to give some of its Heathrow slots to SkyTeam partners Continental, Delta and Northwest. "It appears that [London] Gatwick will retain some services from the U.S. as an alternative for those wishing to avoid Heathrow," according to a recent report from Unisys Transportation Management Consultants. "Whether or not pricing differentials will exist is unclear. However, if slots at Heathrow continue to have extraordinary value, it is conceivable that alternative price points would be used to differentiate the value of those slots."
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