The collapse of the Global Excellence alliance between Swissair, Delta and Singapore Airlines promises a cash boost for the carriers when they liquidate their cross-shareholdings, despite the recent fall in SIA's share price.

Delta values its 2.75 per cent stake in SIA at US$315 million while Swissair's 0.6 per cent share is valued at SFr66 million (US$46.2 million). Both are expected to liquidate their stocks as is SIA, which has a 5 per cent stake in Delta and 2.7 per cent in Swissair.

Airline sources insist there was no management clash between the carriers while SIA negotiated its new deal with Lufthansa. However, Delta and Swissair have been frustrated by SIA's unwillingness to take the cooperation further.

SIA declined to codeshare with Swissair on Zurich-Singapore. Delta, however, shared on SIA's New York service, though the operation was due to be discontinued. The Zurich-based joint purchasing operation will be retained as will common access to FFPs.

SIA's attractiveness to other suitors and the sharp contrast between the feed generated by Delta's Atlantic Excellence partners in Europe and the trickle on Asian routes are the main reasons for the collapse. 'Atlantic Excellence has marched on apace while with SIA we only had the one codeshare,' says Andrew Lobbenberg, manager corporate planning Europe-Pacific at Delta. 'There was not much opportunity for the partners' hubs to work as gathering points [for US-Asia traffic].'

Swissair insists the Asian market now requires route-specific agreements. Swissair has already signed up Malaysia Airlines and is looking to South Korea and China for additional partners.

Doug Cameron

Source: Airline Business