NICHOLAS IONIDES SINGAPORE
Korean Air (KAL) has reinstated codeshare agreements with Delta Air Lines and Air France after more than two years of internal revamp work, finally allowing it to reap rewards from its membership of the SkyTeam Alliance. The South Korean flag carrier, which lost several codeshare partners as a result of accidents between 1997 and 1999, is planning to seek US antitrust immunity with Delta. If successful, it will be the first such agreement between a US and Asian airline.
Under the reinstated agreements, codesharing with Air France takes effect from April and with Delta from May. KAL codeshared with the two before SkyTeam was established, but its partners suspended arrangements in 1999 as a result of safety concerns. The Korean carrier has since been working to improve its operation, saying Air France and Delta are happy with its efforts after carrying out a joint audit in line with US and French government regulations.
Under the new agreements, Air France will codeshare on KAL-operated flights between Seoul and Paris, and, later, on KAL flights beyond Seoul to other Asian destinations. Delta will add its code to KAL-operated flights between Seoul and Chicago, Dallas/Ft Worth, Honolulu, Los Angeles, New York, San Francisco and Washington-Dulles, as well as on flights beyond Seoul to Osaka and Tokyo in Japan.
The US carrier will also codeshare on KAL domestic flights between Seoul and Busan, formerly Pusan, while from 21 May it will add its code to KAL flights between Seoul and Atlanta.
The new revenue sources are seen as important for KAL, which has been suffering financially since well before the September terrorist attacks in the USA. The carrier is predicting a turnaround in its fortunes this year, with revenue growth from the World Cup football tournament this summer, and the reinstatement of the codeshare deals.
The airline suffered huge losses in 2000 and 2001, but is forecasting a $77 million profit this year on $4.6 billion revenues. The World Cup, hosted by South Korea and Japan, is expected to generate $77 million in direct revenue, according to KAL, which says it will carry 90,000 more passengers. The airline says overall operating conditions are also improving: "This should be a fine year for our airline".
Source: Airline Business
