Northwest/KLM relationship could be rejigged post-merger

This story is sourced from Pro
See more Pro news »

Northwest Airlines' long-standing relationship with KLM Royal Dutch Airlines may be renegotiated after the US major merges with fellow SkyTeam Alliance member Delta Air Lines.

KLM and Northwest began their alliance in 1989 with 104 weekly flights and set up their joint venture in 1997.

The agreement "very well might" be altered, said Northwest Airlines VP international marketing and Sales Fred Deschamps at the Boyd aviation forecast conference in Aspen.

The Northwest executive points out that the Northwest-KLM arrangement differs from Delta's current partnership with Air France, which merged with KLM in 2004.

Air France and Delta in October 2008 unveiled a transatlantic venture to initially cover operations between France and the USA, but from 2010 would include all flights between Europe and North America. At that time Delta predicted pre-tax benefits of $125-$200 million from the tie-up beginning in 2011.

Subsequent to the merger announcement by Northwest and Delta in April of this year, those carriers along with fellow SkyTeam members, Air France-KLM, Alitalia and Czech Airlines won approval to form a joint venture.

As for the existing Northwest-KLM tie-up, either side "could choose to renegotiate those terms", says Deschamps, adding that it is possible that there is "at least short-term pressure" to modify the alliance with KLM.