SkyTeam HeadlinesSkyTeam Transatlantic Cooperation Generates Greater Benefits for Customers and Member Airlines
Revenue Projection of Approximately USD 100 million Highlights Continued Growth
PARIS, May 22, 2003 - The SkyTeam Governing Board today outlined a new commercial cooperation on trans-Atlantic routes that will provide all customers with greater flexibility in air travel choices and departure times and coordinated sales policies. The SkyTeam executives also projected that the alliance's trans-Atlantic enhanced commercial cooperation will generate approximately USD 100 million each year in additional revenue for its U.S. and European members over the next three years.
"Our trans-Atlantic cooperation underscores SkyTeam's strength and illustrates the strategic growth of the alliance, in terms of operational excellence and customer service," said the SkyTeam chief executives. "Through continued commitment, SkyTeam is able to help members buffer the impact of difficult economic times and move forward, generating great value for our customers and member airlines."
To support the strong level of coordination achieved through the trans-Atlantic network and sales policy, Air France, Alitalia, CSA Czech Airlines and Delta Air Lines have established a revenue sharing program. The program is a direct result of antitrust immunity (ATI) granted by the U.S. Department of Transportation in 2002 to Air France, Alitalia, CSA Czech Airlines and Delta, allowing the airlines to integrate flight schedules, coordinate aircraft utilization, align pricing functions and enhance numerous customer services. These airlines and Korean Air also received ATI for trans-Pacific routes in June 2002, making SkyTeam the first alliance with both trans-Atlantic and trans-Pacific ATI.
Trans-Atlantic enhanced commercial cooperation enables SkyTeam to continue providing customers with a wider choice of routes and departure times. For example, a SkyTeam passenger traveling from Berlin, Germany, to Orlando, Florida, can select a convenient route through Paris, Prague, Rome or Milan to the United States via any SkyTeam operating carrier. In addition, SkyTeam members act as a single entity in offering the alliance's coordinated services, allowing the carriers to deploy resources in the most efficient manner.
During the Iraq crisis for instance, partners' schedules were jointly adjusted in order to maintain all destinations and SkyTeam services. The same cooperation has been recently implemented to cope with current depressed demand to and from Asia.
As part of the trans-Atlantic commercial cooperation, SkyTeam will offer customers a coordinated sales policy, which will apply to all SkyTeam trans-Atlantic flights regardless of the operating carrier and the routing. For instance, a customer will have the option to travel from San Francisco to Rome via Paris or Atlanta, and return to San Francisco via New York or Paris, using one ticket and the same fare, regardless of the SkyTeam carriers involved in the journey (in this example: Air France, Alitalia and Delta) and the selected routing (via Atlanta, New York or Paris).
Member airlines have formed Market Coordination Committees in all countries of the European Union, the USA, and the Czech Republic. These committees consist of senior managers from each carrier. They are responsible for harmonizing sales and distribution policies on the trans-Atlantic routes, preparing attractive, competitive, and coordinated customer propositions, and promoting SkyTeam among the business travel community.
SkyTeam is focusing its attention on multinational companies that will benefit from the alliance's global network. Joint SkyTeam bids enable member airlines to attract new customers, or increase their market share with existing customers of this type against competing alliances. "We expect this trend to develop strongly in the coming years," the CEOs said.
The U.S. and European trans-Atlantic members have committed to "neutral" contracts with travel agencies and corporate accounts, whereby no preference is given to any transatlantic codeshared flight provided that it is operated by one of those four SkyTeam carriers.
Customers from the USA, the European Community and the Czech Republic will be the primary benefactors of this new trans-Atlantic commercial cooperation. This process will expand to other major markets soon.
On the trans-Pacific, Delta and Korean Air are utilizing ATI to coordinate sales policies on routes between the USA and Korea. Additionally, ATI has permitted joint network planning leading to the introduction of new services. For example, Korean Air has launched a successful new service between its hub at Seoul and Delta's hub in Atlanta. Korean Air is fully participating in worldwide sales coordination, and cooperation is expected to deepen in the future.
Aeromexico continues to study potential benefits of ATI. However, this cannot be implemented at this time due to the lack of an open skies agreement between the USA and Mexico.
Since its inception, SkyTeam has focused on delivering high quality, consistent, and hassle-free services to its customers. Ten customer benefits were implemented in 2001 as the basis of this plan.
Three additional benefits have been added lately, or will be added in the very near future:
- Frequent Flyers can now obtain multi-carrier awards, enabling them to use several SkyTeam carriers with one single award ticket, and offering travel opportunities for fewer miles than before to many destinations. Korean Air Skypass members are expected to receive this benefit in early 2004.
- In June 2003, www.skyteam.com, the alliance's Web site, will re-launch with many new services for frequent travelers such as flight schedules of all member airlines, detailed information about the hub airports of member carriers, as well relevant destination country information (visas, health, tourism and travel tips, etc).
- The SkyTeam European AirPass program, launched in late 2002, enables customers who live outside Europe and who travel to Europe on one of the SkyTeam carriers, to buy a series of intra-European flight coupons valid on SkyTeam's European members, at a very competitive price.
The SkyTeam member airlines forged a strong relationship that enabled the alliance to achieve many goals since its launch in 2000. "We have learned many valuable lessons from each other, we have established effective lines of communication, and we understand our common goals," said the Governing Board. "We have developed a strong collaborative relationship that will benefit the member airlines and our customers in both positive and challenging economic times."
The Governing Board, which comprises the chief executives of the SkyTeam member airlines, Aeromexico, Air France, Alitalia, CSA Czech Airlines, Delta Air Lines and Korean Air, meets semi-annually to discuss SkyTeam progress and announce major initiatives. The Governing Board met today in Paris.
SkyTeam is the global airline alliance partnering Aeromexico, Air France, Alitalia, CSA Czech Airlines, Delta Air Lines and Korean Air. Through one of the world's most extensive hub networks, SkyTeam offers its 220 million annual passengers a worldwide system of approximately 8,200 daily flights covering all major destinations. In 2002, Global Finance magazine named SkyTeam the best airline in their list of the "Best Global Companies." Visit SkyTeam on the Web at www.skyteam.com.
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