One happy family? Are you sure?
In a post on another thread, I just hinted at some of the dramatic effects this will have to traffic patterns in the transatlantic market.
It is interesting to see that I was not the only one thinking about this. This is a quote from an article in today's Crains Detroit Business: “If you start to see (passenger) levels change between Paris and say, Chicago,” Pincavage said, “and those are passengers that normally would have flown to Detroit or Minneapolis, then that’s how they’re going to determine if there’s a problem. That may take until next summer before they know it.” Pincavage is John Pincavage, president of Pincavage & Associates L.L.C., an aviation consulting firm in Westport, Conn.
In short, Northwest stands to lose significant amounts of transatlantic traffic that connects at its hubs if due in part to the influence of shared frequent flyer programs the customer who used to connect at Detroit or Minneapolis to get to Paris now takes advantage of Air France's more convenient service from Chicago.
Remember each of the smaller alliances, Delta with Air France and KLM with Northwest, already have established their traffic flows, flows which definitely favor their own hubs. Air France's presence, however, at major US gateways (e.g., JFK
, Chicago, LAX
, Miami, etc.) that are not hubs of its potential new partners (i.e., Northwest and Continental) suddenly threatens those established traffic flows, specifically the flow from connecting traffic that could just as easily avail itself of direct service on Air France.
Air France may have made concessions to KLM and the Dutch government to preserve the AMS
hub, but no such assurances might be forthcoming to its new US partners. To be sure, Northwest will try to maintain its own traffic patterns by continuing to favor AMS
over Paris as a connecting hub for its own customers. At least for the next three years, or as long as the convenants exist between the Dutch government and Air France, KLM will try to reciprocate. Problem is that the premium passenger who makes all of this alliance formation worth doing is driven primarily by the ability to earn frequent flyer points. If he can do so on Air France more conveniently, without having to connect at Detroit, Minneapolis, Houston, or even Atlanta for his transatlantic segment, and still earn the same FF
points, what is going to keep him on Northwest, KLM, Continental or Delta. Their superior inflight product? You've got to be kidding.
There was a reason why AA
agreed between themselves never to award miles on transatlantic segments unless they were granted full anti-trust immunity to operate as one airline across the Atlantic. AA
rightly feared that BA
's better product and its larger roster of routes to LHR
would cut into AA
's yields. On the other hand, BA
feared that AA
's more generous FF
program would drain its own ranks. If Northwest and Continental do nothing to protect themselves like AA
did, they just might discover sooner rather than later how Air France has a way of turning ever partnership to their exclusive advantage. By next summer, however, it may be too late.