Air France and Delta Propose to Each Other

Thanks to foreign ownership restrictions and political spats, we don’t quite have a marriage here, but Delta and Air France have decided to take one step closer with a joint venture for all flying across the Pond as well as LAX-Tahiti.

Though I don’t know the full details, I think this goes beyond the Lufthansa/United revenue sharing pact and is probably closer to the more robust Northwest/KLM deal. Basically, they pool all the money they make on transatlantic flights and split it up between them. They’re also going to split costs of the operation, so there’s no incentive for Delta to have someone fly on a Delta aircraft instead of an Air France aircraft. Each airline gets equal benefits and that’s good news for travelers.

See, Delta won’t try to push you on their flights now even if an Air France codeshare suits you better. Now they should present all options equally and that’s good news. Don’t expect things to change overnight, though. The first phase next April is pretty limited. It only is in effect for flights between the airline’s hubs and flights from London/Heathrow to the US. Everything else comes into effect by 2010.

So why is Heathrow included in the first round? Open skies, of course. A joint venture like this opens up new flying opportunities, and Heathrow is a prime example. Air France has slots at the jam-packed airport right now, but they use them for flights over to Paris. That might be ok for connecting opportunities, but now with a US partner, Air France can make a lot more money using those slots for Transatlantic flights. In fact, they’ll be launching a flight in the already crowded London/Heathrow to LAX market and they’ll give three slots to Delta so they can fly twice daily from JFK and once from Atlanta.

Unfortunately, Air France isn’t exactly giving Delta the best slots around. Flights times aren’t great. JFK will have one departure in the morning for a daylight flight and the other not until 9p. The ATL departure is even worse – it doesn’t leave until 11p. Despite the times, I imagine it will still perform pretty well for them.

And those aren’t the only flights getting started here. Delta will also be going deeper into France now with flights from JFK to Lyon and to Paris/Orly, the airport to the south of Paris (CDG is north). These will be operated with 757s, so they’re throwing just the right amount of capacity in there.

Until cross-border mergers are allowed, this is going to be the best way to create a global network. Buried in the press release, it’s noted that if they are given anti-trust immunity with Northwest and KLM as well, all four would combine their operations into one huge transatlantic market. That would presumably point to a DL-NW merger here in the US, though that’s obviously just speculation. I imagine we’ll keep seeing more of this as airlines consolidate around the three major alliances.

That means that oneworld will align around American in the US and British Airways in Europe. Star Alliance will align around United (and maybe US Airways) in the US and Lufthansa in Europe. Meanwhile, SkyTeam is aligning around Delta/Northwest in the US (Continental sits on the fence) and Air France/KLM in Europe.

For now, this step is good news for Delta and Air France loyalists. It should open up more opportunities for them all around.