Europe's biggest airline, Air France-KLM, signed a joint venture agreement on Oct. 17 with Atlanta-based Delta Air Lines Inc. to share revenues and costs on their trans-Atlantic routes. The first phase is set to begin in April, just a year after Delta emerged from bankruptcy. By 2010, the agreement will be extended to all trans-Atlantic flights operated by Air France and Delta between Europe and the Mediterranean on one side and North America on the other side, as well as all flights between Los Angeles and Tahiti. During the first phase, the deal will include combined annual revenues of about $1.5 billion annually, with more than $8 billion annually targeted for the second phase.

On June 28, Air France, KLM, Delta, Northwest, Alitalia and CSA Czech Airlines filed for expanded antitrust immunity with the U.S. Department of Transportation. If granted, the immunity would enable Air France, KLM, Delta and Northwest to set up a JV agreement and ultimately integrate their trans-Atlantic operations. The Air France-KLM/Delta JV has an initial term through March 31, 2016.

Expect to hear about more deals of this nature with the Open Skies deal coming to fruition. Air France KLM chairman and CEO Jean-Cyril Spinetta is glad to take advantage of it. He stated, "Since signing the EU-US Open Skies agreement in April, we now benefit from even greater access to worldwide markets offering some of the highest growth potential."

Delta generated 3Q pre-tax income of $363 million on operating revenue of $5.2 billion, the highest quarterly revenue in company history, the firm announced yesterday. This news has fueled thoughts of a merger in Delta CEO Richard Anderson’s head as well. — Baz Hiralal

See more JV details from Delta

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