Competing Through Alliances in the Airline Industry: the Air France- Klm/Delta Air Lines Joint Venture

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------------------------------------------------- Competing through alliances in the airline industry: The AIR FRANCE- KLM/DELTA AIR LINES JOINT VENTURE In less than twenty years, the global industry has gone through tremendous change. Several airlines had gone out of business that had been on top of the industry for years. One of the remarkable changes had been airline alliances. The case focuses on the airline industry and how airlines are forming alliances and joint ventures. It then introduces the partner firms Air France KLM , and Delta . Air France KLM had over 25 collaborative agreements with other carriers and was a founding member of Skyteam, one of the leading airline groups. Air France KLM and Delta Airlines formed revenue…show more content…
These are all things that have to be considered. Some of the alternatives both airlines can use is understanding each airlines’ knowledge and skill base. They can also balance collaboration and competition with the alliance, and maintain loyalty among their airlines. Trust is essential to their relationships. There has to be a clear understanding of how funds will be disbursed and how each company can go about individual pursuits and how it affects the other. The idea of joint ventures are to gain a competitive advantage over others. Each company benefits in joint ventures because they get to expand their market by gaining new routes, and they share revenues and costs. According to Appendix 3: Air France/KLM Income Statement, from 2006-2011 revenues increased from 21,452 million Euros in 2006 to 23,622 million Euros in 2011, with a decrease from 2008-2010. Appendix 4 shows Air France/KLM Key Ratios. There is a pattern of deceases from 2008-2010 which is evident through its profitability ratios. According to Appendix 6: Delta Air Lines Income Statements, there was significant growth from 2006-2011 with an operating income of 17,532 million USD in 2006 and 31,755 million USD in 2011, with a significant decrease from 2006-2007. It’s also true that their customers enjoy benefits such as a more varied choice of destinations with more frequencies and adapted schedules, frequent flyer programs and competitive fares. The

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