Chris Jasper/LONDON Hilka Birns/CAPE TOWN
The Atlantic Excellence Alliance has been wound up, formalising the split between the group's leaders, Delta Air Lines and Swissair, which emerged following the US giant's bilateral agreement with Air France.
The alliance was formed in June 1996, bringing together Swissair, Austrian Airlines, Belgium's Sabena and Delta, but was doomed as soon as the latter decided in June to build a global alliance in tandem with the French flag carrier. Swissair regards Air France as a major competitor, and could not live with the new arrangement.
Austrian quit Atlantic Excellence and joined the Star Alliance last month after deciding that it could not wait for Swissair to decide on a new strategy. It also left the Swissair-led Qualiflyer Group, taking with it partially owned associates Lauda Air and Tyrolean Airways.
Atlantic Excellence codeshares will be terminated on 5 August next year, with the four carriers agreeing to honour travel agent and sales agreements until the end of this year. The alliance's frequent flier programme will remain in place "until further notice".
Delta executive vice-president Fred Reid says it "extended invitations to Swissair, Sabena and Austrian Airlines to consider joining Air France and Delta in expanding our new global partnership". He adds: "Unfortunately, it has become apparent that benefits associated with such participation were not there for all affected parties."
As a preamble to the termination of Atlantic Excellence, Delta and Swissair have relinquished shareholdings in each other's businesses, acquired as part of the three-way Global Excellence alliance, taking in Singapore Airlines (SIA) that was established in 1989. Delta gave up a 4.5% stake in Swissair and the Zurich-based airline is poised to dispose of a 4.6% stake in Delta. Mutual holdings involving Star target SIA were relinquished in September.
Reid says that Delta, Air France and confirmed partner Aeromexico will now "move ahead" in building a global alliance of their own. Swissair's own alliance future, and that of part-owned subsidiary Sabena, appears ever-more complicated. Qualiflyer is now a rump group built around the SAirGroup, which is involved in bids for equity stakes in a number of airlines that it hopes to secure as allies.
Key to Swissair's strategy is an Atlantic codeshare deal with American Airlines, which also includes Sabena. The agreement will cover three of American's US hubs, as well as Zurich and Brussels.
According to SAir, it is now likely to be expanded further. SAir has played down suggestions that it could commit to the US major's oneworld grouping, but such a move would help solve its growing alliance dilemma.
• South African Airways, in which SAir took a stake in June, has dropped US codeshare partner American in favour of Delta. The move would appear to conflict with the Swiss company's own strategy, but Coleman Andrews, SAA chief executive, says the airline chose Delta because it brought access to Atlanta, "being hands-down the most important connecting hub in the world".
SAA will continue daily Johannesburg-New York services, but non-stop Cape Town-Miami flights will be dropped in favour of an Atlanta-Johannesburg-Cape Town combination.
Andrews says the American move is the last major element of its "starburst strategy" of bilateral partnerships with leading carriers on all continents, according to which access to major hubs takes priority over other concerns, including global alliance ones.
SAA is on track "to have a year that is well ahead of last year", says Andrews, adding that "progress we've made in the first 12 months certainly went beyond what I had expected".
Source: Flight International