Both Continental Airlines and Delta Air Lines were swift to respond to the new US-French bilateral by declaring their intentions to formalise codeshare agreements with Air France.

The bilateral, initialled in Paris on 8 April, will allow full open skies to be phased in over five years, and immediately removes limits on codesharing services between US and French airlines. US airlines will be permitted to add nine daily services to any point in France over the five years, with three in the first year.

Two alliances may now serve the US-France market, which will likely trigger the next round of movement in the global alliance game. Continental says it will submit a formal filing for a codeshare with Air France so that it can offer new destinations in Europe, the Middle East and Africa. 'Codesharing is the next logical step,' says Continental. However, Delta's president and chief executive officer Leo Mullin, seems determined to keep Air France focused on Atlanta and would clearly like to add the French carrier to his transatlantic alliance. 'It enables Delta to add one of the world's most important airlines as a strategic commercial partner,' says Mullin.

As an immediate step, Delta plans to place its code on Air France services between Paris and Boston, Chicago, Los Angeles, New York, San Francisco and Washington DC and on a new Air France service to Atlanta. Air France will codeshare on Delta services from Paris to New York, Atlanta and Cincinnati, and on a New York-Nice flight.

Despite speculation that Air France will now have to choose between Delta or Continental as a USpartner, a spokesman at Air France says it has no plans to do so, seeing the two airlines are 'complimentary' for Air France.

Negotiators describe the deal as being a transition to full open skies minus fifth freedom, the issue that most concerns the French. But observers believe this could become a non-issue over the next five years as alliances and codeshares make beyond rights less necessary to passenger airlines. The agreement does, however, allow France to fly beyond the US to two points of its choice and also relaxes beyond rights for cargo operators.

The accord spells good news for cargo carriers, allowing the US to designate two cargo airlines in addition to FedEx. It also removes all restrictions on the number of routes designated cargo carriers can serve, adds a large number of third-country destinations and allows FedEx to establish a European hub at Paris/Charles de Gaulle.

A Paris-based consultant, meanwhile, adds a cautionary note. He worries that France will not be able to absorb the increase in traffic brought by the bilateral agreement and that there may be a period of predatory pricing.

Source: Airline Business