blrsea
Posts: 1444
Joined: Fri May 20, 2005 2:22 am

Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 4:11 am

AF and KLM are now one single company. NW had code-share agreement with KLM earlier, so even now only KLM flights show up on NWA website. Why doesn't it show AF flights too now that they are a single company? Same with AF, it shows only DL connecting flights in US but not NW.
 
Joost
Posts: 1845
Joined: Wed Apr 20, 2005 8:27 pm

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 5:24 am

First, there is an interlining agreement between NW and AF, but no full codeshare agreement (maybe you should change the title?)

It has to do with all kind of legal issues and anti-trust situations.

By a specific construction, KLM and AF are still considered as different airlines by the authorities. For this reason, for example, the Dutch government has a kind of golden share in KLM in order to keep it officially Dutch, and more of these constructions.

KL and NW are granted antitrust immunity on 'between-hub' (=transatlantic) routes, and so are AF and DL. Therefore, all AMS-USA flights on KL or NW carry both the KL and NW code, as do all France-USA flights carry DL and AF on flights operated by either carrier. On these routes, they do not need to compete.

However, KL-DL have no immunity, neither have AF-NW. Therefore, KLM and Delta compete on the routes AMS-JFK and AMS-ATL; AF and NW compete on CDG-DTW. They have to, because otherwise it would be an antitrust violation.

However, they have the right to codeshare beyond the hubs. Some flights AMS-Europe carry the DL code, some DL flights from ATL carry the KL code; some French domestic routes on AF carry the NW code, etc. This is virtually always allowed, as there are no antitrust issues: NW would never compete on CDG-TLS anyways, for example.

It is a bizarre situation, especially as KL and AF are effectively one company and pursuit profit for the company as a whole. They, together with NW and DL, have therefore requested antitrust immunity for the KL-AF group with both NW and DL, but the US have denied, as it would result in a lack of competition. If an eventual merger would take place between DL and NW, the issue will be looked at again; likely, a new DL-NW would need to reduce capacity and possibly give up valueable slots before they get antitrust immunity.

Hope this helps.
 
bobnwa
Posts: 4486
Joined: Fri Dec 22, 2000 12:10 am

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 6:08 am

Quoting Joost (Reply 1):
First, there is an interlining agreement between NW and AF, but no full codeshare agreement (maybe you should change the title?)

It has to do with all kind of legal issues and anti-trust situations.

By a specific construction, KLM and AF are still considered as different airlines by the authorities. For this reason, for example, the Dutch government has a kind of golden share in KLM in order to keep it officially Dutch, and more of these constructions.

KL and NW are granted antitrust immunity on 'between-hub' (=transatlantic) routes, and so are AF and DL. Therefore, all AMS-USA flights on KL or NW carry both the KL and NW code, as do all France-USA flights carry DL and AF on flights operated by either carrier. On these routes, they do not need to compete.

However, KL-DL have no immunity, neither have AF-NW. Therefore, KLM and Delta compete on the routes AMS-JFK and AMS-ATL; AF and NW compete on CDG-DTW. They have to, because otherwise it would be an antitrust violation.

However, they have the right to codeshare beyond the hubs. Some flights AMS-Europe carry the DL code, some DL flights from ATL carry the KL code; some French domestic routes on AF carry the NW code, etc. This is virtually always allowed, as there are no antitrust issues: NW would never compete on CDG-TLS anyways, for example.

It is a bizarre situation, especially as KL and AF are effectively one company and pursuit profit for the company as a whole. They, together with NW and DL, have therefore requested antitrust immunity for the KL-AF group with both NW and DL, but the US have denied, as it would result in a lack of competition. If an eventual merger would take place between DL and NW, the issue will be looked at again; likely, a new DL-NW would need to reduce capacity and possibly give up valueable slots before they get antitrust immunity.

Hope this helps.

Good explanation. You explained it perfectly.
 
runway23
Posts: 1947
Joined: Sat Jan 15, 2005 2:12 am

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 6:12 am

Quoting Joost (Reply 1):
AF and NW compete on CDG-DTW. They have to, because otherwise it would be an antitrust violation.

They might compete but a codeshare agreement is in force since September 2 2006 on CDG-DTW flights.

I think what the OP is referring to rather is the non-presence of AF flights on NWA.com. This isn't down to codeshare agreements (or interline which is something totally different), but due to a marketing and sales agreement built into the operation of both airlines whereby KLM serves as NW's agent in EMEA and parts of Asia whereas NW does the same for KLM in the remaining countries. As such, the revenues on KLM/NWA transatlantic routes are split up between both airlines.

Such an agreement does not exist between AF and NW and the agreement which currently exists between AF and DL is way less comprehensive.
 
Jano
Posts: 747
Joined: Sun Jan 18, 2004 1:48 am

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 7:38 am

Quoting Runway23 (Reply 3):
I think what the OP is referring to rather is the non-presence of AF flights on NWA.com.

They do show up from time to time. I fly TYS-VIE about 6x a year. Mostly TYS-VIE is the cheapest option via DTW or MEM and AMS. But from time to time nwa.com shows TYS-DTW-CDG-VIE (or at least either outbound or inbound via CDG) as the cheapest and one can purchase it there at nwa.com.
The Widget Air Line :)
 
blrsea
Posts: 1444
Joined: Fri May 20, 2005 2:22 am

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 3:11 pm

Thanks for the explanation. It doesn't make sense for US not to allow AF/KLM-NW/DL code share as AF/KLM is effectively one company.
 
ANother
Posts: 1833
Joined: Thu Nov 03, 2005 2:47 am

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 6:20 pm

Quoting Blrsea (Reply 5):
AF/KLM is effectively one company.

Not true. AF is a French airline that flies from France to the USA, KL is a Dutch airline that flies from the Netherlands to the USA.

They may be closely integrated, but they are separate companies.
 
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mats
Posts: 544
Joined: Sat Jul 05, 2003 11:20 pm

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 11:18 pm

I just flew CMH-DTW-JFK-CDG-ARN on Northwest (first two segments) and Air France (last two segments.) Northwest provided one-stop check in, Air France boarding cards, and interline baggage check-in, and mileage credit. The flights are not codeshared, but everything else was closely coordinated.
 
bobnwa
Posts: 4486
Joined: Fri Dec 22, 2000 12:10 am

RE: Why No NW-AF Interlining Agreement?

Thu Jan 25, 2007 11:29 pm

Quoting ANother (Reply 6):
Not true. AF is a French airline that flies from France to the USA, KL is a Dutch airline that flies from the Netherlands to the USA.

They may be closely integrated, but they are separate companies.

There is one president of AF/KL who is French.
There is AF/KL stock, not KL stock and AF stock, if you want to buy shares.

Sounds like the same company to me!!!!!
 
haggis79
Posts: 535
Joined: Tue Jun 27, 2006 8:05 pm

RE: Why No NW-AF Interlining Agreement?

Fri Jan 26, 2007 12:49 am

Quoting Bobnwa (Reply 8):
There is one president of AF/KL who is French.
There is AF/KL stock, not KL stock and AF stock, if you want to buy shares.

Sounds like the same company to me!!!!!

sorry but this is rubbish.... Air France and KLM are both 100% owned by AirFrance-KLM Finance (the holding company whose shares you can buy at the stock exchange), but that doesn't make them the same company. Actually, there is AF stock and KL stock, it's just not traded on the stock exchange. Saying "they are the same company" would make for instance Airbus and Eurocopter (both owned by EADS), Opel and Saab (both owned by GM) or many others make the same - which they are clearly not. (I'm sure there are American examples as well, which I just don't know about... maybe some US-based a.netter could shed some light on this...?)
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lijnden
Posts: 530
Joined: Wed Apr 02, 2003 1:34 am

RE: Why No NW-AF Interlining Agreement?

Fri Jan 26, 2007 7:16 am

The largest shareholder of KLM is the holding Air France-KLM
The largest shareholder of Air France is the holding Air France-KLM
The holding Air France-KLM is traded for shares in both Amsterdam and Paris (maybe even in New York). Among the largest shareholders are still the French government and the Dutch government. To say that Air France-KLM is an airline is wrong. Air France-KLM is an investment company that also has a big stake in other airlines and some hotel groups.

Cathay Pacific has a similair situation, where the largest shareholder is Swire Group plc. I believe they are based in England. A few months ago Qantas, the national airline of Australia, was bought up by some rich Texans.

The code-sharing done with the airlines, incl. Continental, NWA and Delta is done on behalf of the Sky-Team alliance.
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