Wings Gets Alitalia As AA, UA Attract Asian Allies
<B> Wings Gets Alitalia As AA, UA Attract Asian Allies</B>
By Jay Campbell
<I>New York</I> - Assuming it can appease the legislators pressuring the Clinton administration to halt U.S.-Italy open skies, Alitalia and its new partners KLM and Northwest will apply to the federal government for antitrust immunity that would allow them to negotiate joint corporate contracts, among other things.
Forty Congressmen last week responded to the May 10 announcement of Alitalia's new link with KLM/Northwest by asking President Clinton to hold off on open skies until Alitalia resolves a dispute with its New York-based employees, who have been locked out for more than five years. The last round of talks between the Italian carrier and its employees took place nine years ago.
If the dispute finally is resolved, joint corporate deals would be driven from a new joint sales office. The three partners' other main initiatives would include codesharing, integrated frequent flyer programs, reciprocal airport lounge access and coordinated flight schedules.
The announcement followed news coming from Europe in April that Alitalia's sales force in the Netherlands was integrated into KLM Benelux, and KLM's sales operations in Italy were placed under Alitalia's wing. KLM and Alitalia signed a joint cooperation agreement in November.
Meanwhile, the airline selloff of their stock in the Galileo global distribution system, seen as an attempt to line up GDS ownership with alliance goals (<I>BTN,</I> May 3), also drew in Alitalia as a latecomer. Joining partner KLM and others, Alitalia is selling 1.5 million shares of the GDS for approximately $75 million, while holding onto a 1 percent stake of 98,960 shares.
<B><CENTER>Air Alliances Forge Ahead</CENTER></B>
The three carriers also will attempt to expand their alliance in competition with the growing Star and Oneworld alliances. Star appears to be closer to drawing in Singapore Airlines following its announcement in early May of a "strategic bilateral alliance" with United that will allow integrated frequent flyer programs in July and one-stop checkin by the third quarter.
Meanwhile, American Airlines and Japan Airlines this month began codesharing in an arrangement that likely will lead to JAL's inclusion in the Oneworld alliance.
Tentatively called Wings, the expanded Alitalia-KLM/Northwest alliance probably will add America West Airlines and Continental Airlines. Alaska Airlines already works with Continental and Northwest, and Air France is expected to decide between Continental and Delta by year-end (<I>BTN,</I> March 8).
Other alliance programs will include the integration of information systems for inventory management, pricing, reservations, ticketing, distribution and other operational systems.
"We believe the Northwest/KLM joint venture is the most advanced form of aviation commercial cooperation in the world," said Alitalia executive vice president of strategies and alliances Mario Rosso. "We are delighted to be joining this venture."
The carriers marked Alitalia's addition to the Northwest/KLM transatlantic joint venture by signing a Commercial Cooperation & Integration Agreement and an Alliance Coordination Agreement.
"KLM and Northwest have developed the most far-reaching and progressive aviation joint venture in the world," said A.B. van Luyk, executive vice president of KLM's passenger division. "We have worked hard to stay at the forefront of this innovative development and the results have been extremely positive for our companies and our customers. Since 1992 we have increased the number of transatlantic flights we operate by 87 percent. We are delighted that Alitalia will be joining us in continuing this record of growth and improving service.