Air France, KLM and Delta pilots sign joint venture agreement

If anyone didn’t think that the airlines were serious about taking advantage of the antitrust immunity awarded them by the Department of Transportation (DOT), think again.

In the first major move after forming their joint venture SkyTeam has enlisted union support.

Delta Air Lines and Air France KLM Group operating units Air France and KLM yesterday signed a joint venture protocol with their respective pilot union leaders recognizing “that a cooperative and productive relationship is essential to the success of the corporations’ Joint Venture Agreement,” which was signed last May.

After receiving permission to operate with no antitrust limitations last year, Air France, KLM and Delta formed a joint venture to completely share their capacity, revenue, costs and profits/losses on their routes between North America and Europe, between Amsterdam and India and between North America and Tahiti.

Make no mistake about this. This joint venture can operate as an independent international airline complete with its own board of directors, marketing arm and eventually employees.

These airlines are moving forward to create the most highly integrated network of international routes and hubs all under a separate corporate structure, free from the limitations of their respective national governments, other than permission to legally collude.

Bringing the pilots aboard as partners in this antitrust arrangement now allows the pilots unions to share information as well through the joint venture. The pilots hope to develop a system to share their workload and to even out the distribution of routes between these three major operations.

I predict that hiring new pilots for the joint venture will be an adventure.

For example, United Airlines who has formed a joint venture with Aer Lingus and is now flying planes transatlantic between Washington Dulles and Madrid. The aircraft are operated by Aer Lingus with third party crews while the marketing and administration is handled by United.

Anyone searching for these IAD-MAD flights will find them listed with United and Aer Lingus flight numbers and with the added notation: Operated by AER LINGUS LIMITED. For now, as I understand it, the pilots and planes are Irish but the flight attendants come from Eastern European countries. It doesn’t take much to see that United pilots and flight attendants, shut out of this joint operation, are not taking the arrangement well.

This is one of the first unique tie-ups that has been forged under the “open skies” agreements between Europe and the United States.

Hopefully enough of the “open skies” routes will be developed to keep pressure on the three main airline alliances and their pricing power.