Julian Moxon/AMSTERDAM

KLM and Alitalia signed a far reaching "master cooperation agreement" on 27 November, which, although it stops short of equity exchange, commits the two airlines to "uniting as deeply as possible".

Alitalia managing director Domenico Cempella warns, however, that the airline, which is still majority government-owned (67%), cannot move much further towards becoming a partner in a global alliance without privatisation, now expected to take place by the second quarter of 1999.

Alitalia will join the existing KLM/Northwest agreement covering the North Atlantic market "subject to mutual agreement and regulatory approvals".

The KLM/Alitalia partnership, however, will be a "global alliance" not just transatlantic, Alitalia makes clear. The European Commission will investigate the deal. Alitalia's membership of the planned Wings Global Alliance must await US Department of Transportation go-ahead, expected next year. "We hope Continental Airlines will step into our co-operation as well," says Cempella.

The alliance takes the form of a two-phase agreement on passenger and cargo. Cooperation involving destinations and coordinated services to Australia and southern Africa got under way during October, but starting in 1999, the airlines' entire networks will be integrated, according to Cempella.

A "unique European multi-hub system" will be based on Amsterdam Schiphol, Rome Fumicino, and Milan Malpensa airports. Codesharing between Amsterdam, Milan, Rome, Venice, Bologna, and Turin has begun, while KLM's regional partners have started direct flights to Malpensa to "-ensure a finely meshed route network", says KLM president Leo Van Wijk, who adds that the deal is expected to improve the passenger revenues of each airline by around $380 million over the next three years and of cargo operations by $65 million.

Source: Flight International