The below was just posted as a SkyTeam Newsflash for December; lots of discussion about the benefits of KQ coming onboard as a ST Associate, but still no concrete information as to when their membership will be effective:

SKYTEAM NEWSFLASH - DECEMBER 2006



SkyTeam, the global airline alliance partnering Aeroflot, Aeromexico, Air France, Alitalia, Continental Airlines, CSA Czech Airlines, Delta Air Lines, KLM, Korean Air and Northwest Airlines, sets itself apart by offering an exclusive experience for all passengers. Issued monthly, SkyTeam NewsFlash provides media with key updates and insights on alliance activities.

This month, NewsFlash features a Q&A with Hans de Roos, senior vice president, Alliances, KLM Royal Dutch Airlines; and Richard Mwikamba, head of Network Planning & Airline Strategy, Kenya Airways, a SkyTeam Associate Airline candidate. Hans and Richard share with us some insights on the SkyTeam Associate Program, launched June 2005, and its benefits to customers, alliance members and Associate Airline candidates.

Q. KLM and Kenya Airways have a long-standing relationship, which has resulted in KLM’s sponsorship of Kenya Airways as an Associate Airline candidate. How will this relationship be impacted as Kenya Airways joins the Associate Program officially?

HDR: The current strategic and commercial co-operation between our airlines is very well established already and will benefit from being embedded in the broader group of SkyTeam partners. Moreover, as a shareholder, KLM is interested in Kenya Airways’ development. As a strong African carrier with a strong international network, Kenya Airways can help support the development of the economic interests of Kenya and neighboring countries in East Africa and create employment in the aviation industry. This kind of economic development will in turn help create in additional traffic to and from East Africa.

Q. Richard, what will becoming an Associate Airline in the SkyTeam alliance mean to Kenya Airways?

RM: The first immediate benefit will be a strong increase in brand awareness and better brand positioning internationally. SkyTeam operates in most major markets around the world and already enjoys a broad and loyal customer base, with 373 million passengers annually. As Kenya Airways and other Associate Airline candidates become official members of SkyTeam, the alliance’s worldwide base of customers will be more informed on our strengths and offerings and will have increased access to our networks through the existing members of the alliance.

HDR: Participation in the program will also lead to additional traffic through code share agreements and the ability of customers to earn and redeem frequent flyer miles on all of our member airlines and Associate Airlines, a fundamental benefit to all of our customers.

Additionally, once the Associates are official, they will develop interline e-ticketing with all members, as well as enter into lounge agreements and participate in product offerings, all of which will help increase the level of convenience and service available to their customers and provide cost savings and/or additional revenue for them.

RM: And on the other hand, SkyTeam will have a stronger network offering for its customers as we [and other Associate Airline candidates] officially become part of the Associate Program. For example, our addition to the network will make it possible to provide additional city pairs to SkyTeam customers, such as Nairobi-Mumbai, Dubai-Guangzhou and many intra-Africa routes.

Q. Will the travel experience for Kenya Airways customers change once their status as an Associate Airline with SkyTeam is official? If so, how?

RM: Our customers will benefit from access to an extensive global network and the full benefits enjoyed by SkyTeam alliance passengers. These include access to SkyTeam lounges and the ability to earn and redeem miles on flights operated by additional carriers.

In addition, as we prepare to join the SkyTeam Associate Program, we have placed an order for six Boeing 787 Dreamliner aircraft with the aim to grow internationally, thereby connecting our Nairobi hub with other hubs in the SkyTeam network, beyond Amsterdam, and Paris, which are currently served.


Q. We discussed the Africa market briefly in our last Q&A with Mark Erwin of Continental. Can you both give us some additional perspective on SkyTeam’s and Kenya Airways’ outlooks for travel to/from the Africa market in 2007 and beyond?

HDR: Well, Africa has unique wildlife richness and many important cultural assets. And we all know that Africa has a wealth of natural resources, such as ore, crude oil and gas, metals and agriculture, which are very important to the world economy. The continent is also important for its tourism industry. This gives the market huge travel potential. As the world continues to consume products and resources around the world, we will see double digit traffic growth for the market over the next decade. All in all, this market provides a strong opportunity for us to grab considerable market share.

RM: And over the past four years, Kenya Airways has realized double digit growth itself. We expect this trend to continue for years to come, in line with what Hans mentioned before. Currently, Eastern and West Africa are the largest areas for development in the region, and therefore we expect these to be the regions of high-traffic demand in the coming years.