Klm is Dead - Long Live KLM

Had an interesting discussion with a KL supervisor. He indicated that they were receiving internal briefings from Air France on what a great airline Delta was and that Delta may be set to become not only AF's but also KL's North Atlantic partner.

Apparently AFKL are now talking in more concrete terms of jettisoning the KL-NW contract.

Could this be the end of our legacy FD/Flying Blue benefits on NW?
the end of the successful KL - NW venture?
the beginning of the end of Schiphol's ambitions as European mainport?

Threy

NW and DL have to merge to make sure that both carriers have a future.

CO will be merged/taken over sooner or later and could leave Sky Team...

Delta`s hubs are not positioned well enough to take all TATL traffic.

Who wants to detour via ATL every time. Way too costly...JFK is only a secondary hub measured in number of possible online connections.

CVG and SLC are tertiary transatlantic hubs and far inferior to DTW/MSP in several aspects.

Considering the shrinking that takes place at DL and especially NW domestically however, I see more chances to get the desired multi carrier anti trust immunity...

yocko

i hung out with a NW captain, who was certain of the fact that the NWKL alliance was about to end,,,

ClipperDelta

Here you are mixing two notions- the passenger's perspective vs. the airline's operating costs.

"Who wants to detour via ATL every time?" Here you're talking about the passenger and frankly, the passenger couldn't really care less if DL's departure and arrival times are competitive and gets him/her to the destination in a shorter or comparable timeframe as on CO via EWR or on AA via ORD, etc. This is entirely possible, for example, if CO has a longer connecting time in EWR, thus prolonging the overall journey for the passenger, even though with ATL, the passenger may actually be flying more hours but has a shorter connection time.

"Way too costly" is not from the passenger's perspective. DL is not charging the customer more for routing through ATL or through any other hub. DL charges the same price for the trip whether the connection is via JFK or CVG, and in all likelihood, the same price as AA via JFK or DFW or ORD or MIA, or as UA via IAD, ORD, etc. You're talking about costly only from the perspective of DL's RASM/CASM because going through ATL may involve a longer flying distance, thus increasing DL's costs, but not the passenger's...

At the end of the day, KL survived very nicely with NW's hubs of DTW, MSP, and MEM, all of them not that great either, especially when trying to get to the Northeast U.S. At least DL has JFK, which even though nowhere near the size of ATL, still offers faster connections to places like BOS, PVD, BDL, PHL, DCA, IAD, SYR, ALB, ROC, BUF, BTV, MHT, PWM, ORF, BWI, RDU....KL/AF will do fine with their US hubs even if they are eventually only stuck with DL...

Zembla

I've heared this rumour before. Even to the point that it got broadcasted on Dutch national TV. I think it was in 1999. Not much later NW and KL announced the continuation of their alliance for another x (sorry not certain about the number) years.

Thus far the alliance has been a big success. The only two reasons for a split I can think of are: NW-KL is no longer profitable, or there is an anti-trust problem.
AF argumenting 'DL is a great airline' is nonsense. They'll look at the figures first!

Let's be realistic. No way NW can survive without a strong alliance, unless they are taken over by another US airline.

Threy

Clipper,

I pointed out the disadvantages of ATL ad nauseam, not only for the passengers, but also for the airline, even if we exclude opportunity costs at all. ATL used to be a major regional hub for Eastern and DL and had a brilliant position for those two carriers, but is not located well enough to be a major TATL hub...

JOUY31

Please, ClipperDelta and Threy, no personal attacks nor disruptive comments. These will be edited out without any further notice and will be treated according to the TOS. Whatever disagreements may have occured on other FT boards, they will not be carried over to this one. Last advisory.

joseph-GLA

Neither KLM nor Delta have sufficient numbers of widebody aeroplanes to fly the transatlantic routes that KLM filters on to Northwest. I have rarely actually flown on KLM when I go to america on the trans-atlantic route. KLM & Northwest operate as one airline in this regard and have the anti-trust immunity to do so, not to mention that KLM owns 25% of Northwest.

It is quite possible that NW & DL will merge, but at the moment it is not feasible for KLM to change partner. Just look at the ramps at AMS - so many NW aeroplanes that you could easily be in MSP!

sjefenole

In the eventuality of this happening, AF and KL should start serving SEA. Currently this is operated only by NW on SEA-AMS.

NilsHolgerson

See NW WP board.

Threy

A DL / NW merger would certainly make a lot of sense and considering the value of both companies at the moment, it should be relatively easy to handle.Modern mergers a la KL/AF and LH/LX do not need compatible fleets or equal cultural backgrounds anymore and KL/LH stated multiple that they only integrate when they create genuine value, so it is not like DL and NW will meet somewhere between MSP and ATL on a big field and duel themselves until they found a solution where to base the new company..., however the replacement of the DC 9 without the need to purchase new aircraft alone would be a big factor and the leverage of NW/DL would be huge.

IMO we see two major mergers anytime soon and I would hope for NW/DL. LH and AF are certainly calling the shots to a certain extent via their respective alliances...

Cris L

The editorial of ATW magazine - August 2006 issue take advantage of Norman Mineta's departure as Secrtetary of transportation to criticise the DoT, for several things.

1 of these things is the denial of anti trust immunity for Skyteam.

Interestingly the magazine comments that regrettably they failed to criticise the action of the DOT at the time!!

Zembla

AF is starting code-shared flights with NW

http://www.airfrance.us/cgi-bin/AF/U...cekedgfndfoi.0

So, again, I do't think so.