SkyTeam triples membership in first decade, upgrades three airlines, signs pilot JV
China Eastern can now begin the process of becoming a SkyTeam member after an agreement was signed by the carrier and the alliance during 10th anniversary celebrations in New York yesterday. At the event, SkyTeam made Air Europa, Kenya Airways and TAROM full members of the alliance from their previous associate membership. Associate members were those who wanted the alliance benefits but did not yet meet all strategic criteria to become full members. “With a higher degree of maturity reached in alliance development and integration, SkyTeam now fully integrates all members into the alliance,” said the organisation in making the announcement. "This change will reinforce the cohesion among the partner airlines.”
With its new Asian members, SkyTeam is turning its focus to expanding its presence in Latin America, Southeast Asia and India, where major carrier Kingfisher Airlines just signed with oneworld. See related report: American Airlines strikes back at doubters: Bullish on future, alliances key
"Over the past decade, SkyTeam has played a vital role in extending our customers' reach beyond the many points Delta serves," said Delta CEO Richard Anderson. "This will continue as SkyTeam pursues a strategy of valuable growth by recruiting even more members that offer our customers access into new regions."
First 10 years
Born on the Open Skies trend, the alliance began in 2000 with founding members, Aeromexico, Air France, Delta and Korean Air and has since added nine members, including the recent addition of Vietnam Airlines. TAROM assumes the formal membership mantle on Friday. From the four founding members, it has grown to more than 13,000 daily flights to 898 destinations in 169 countries, up from 6,402 daily flights to 451 destinations in 98 countries at its inception.
"As deregulation and Open Skies agreements opened opportunities for more effective business alignment, SkyTeam emerged as a way for airlines to offer customers more connections across the globe through alliances rather than complex intercontinental mergers. And our growth will continue,” said SkyTeam Governing Board Chairman Leo van Wijk during yesterday’s ceremonies. “During the last 10 years, SkyTeam's experience with ground-breaking mergers and joint ventures has deepened the cooperation among our members, giving our customers access to more markets at lower fares. As we look back at SkyTeam's steady growth of members, all are focusing on creating global coverage by linking complementary networks, flying from a few of the best hubs in Europe, the US, Asia and Africa. Today we offer our customers more destinations, more frequencies and more and better connectivity."
The China Eastern Adherence Agreement signals the alliance’s growth in Asia. "Asia is a very important growth market for SkyTeam,” said SkyTeam Managing Director Marie-Joseph Male, “and we are well on track to strengthen our offering in this fast-growing part of the world. With our newest member Vietnam Airlines, and China Eastern joining us in the future, we will offer our customers 10% more daily flights than today. Combined with China Southern and Korean Air, these four Asian carriers will further strengthen SkyTeam's presence in Asia and position us for future growth. And we still intend to add more Asian carriers to our group, thus firmly consolidating SkyTeam as 'the' alliance for Asia." Garuda Indonesia is also pursuing SkyTeam membership.
Pilot agreement signed to ensure equitable distribution of work
During its general meeting the CEOs from Delta, Air France and KLM signed a six-way joint venture protocol with the three carriers’ pilots unions. The protocol recognises the importance of pilots in the success of the joint venture established in May-2009 and essentially ensures that the equitable distribution between the three members. In signing the agreement, the leaders committed to mutual understanding and information sharing between each other concerning all aspects of the agreement and recognize that the success of the Joint Venture will provide benefits and opportunities for all parties.
"This is a milestone agreement, and I believe it will serve as a template for future labour-management engagement in the industry's globalisation arena," said Captain Lee Moak, chair of the Delta Master Executive Council of the Air Line Pilots Association. "Recent joint venture agreements at other properties have alienated labour by treating labour not as a partner, but as just another cost to be managed. In today's global marketplace, that is a formula for disaster. Instead, when the long-term interests of management and labour are aligned, it makes much more sense to engage through a professional working relationship for the benefit of all parties."
"As pilot labour, we view it as critically essential that no single corporation or pilot group benefits at the expense of the other, and this agreement helps to establish a level of mutual trust and cooperation between all parties to the agreement" VNV President Captain Evert van Zwol explained. "International joint ventures are the next step in our industry's evolution, and involving labor as a partner at the outset provides for a much greater probability of long-term success. We are pleased that the executives of KLM, Air France and Delta recognise this."
In addition to establishing a balance of flying between the carriers, the agreement calls for the corporations to provide their respective pilot unions with "detailed historical and projected operating and financial information on the JV" on a regular basis as well as periodic meetings "to further develop relationships and to share information on the status, progress and future initiatives of the JV, in order to enhance the success of the JV."
"This agreement is built upon a cornerstone of collaboration rather than confrontation and on mutual benefit rather than antagonism" said Air France ALPA President Captain Louis Jobard. "Our airline executive teams understand that labour is an important asset in the Joint Venture. This Protocol Agreement helps to establish a strong and stable foundation for the Joint Venture moving forward, which is vitally important to its success."
The Joint Venture Protocol Agreement became effective at its signing and remains in effect concurrent with the Joint Venture agreement.