EU approves Air France-KLM, Delta, Alitalia tie-up

May 12, 2015, 1:21 PM EDT
Air France-KLM Chairman and CEO Alexandre de Juniac Air France-KLM Chairman talks after the landing of an Air France medium haul Airbus A319 at Roissy Charles de Gaulle airport on March 18, 2015.

Air France-KLM (AIRF.PA), Delta Air Lines (DAL.N) and Alitalia [CAITLA.UL] secured EU antitrust approval on Tuesday for their profit-sharing pact after offering to help rivals enter the market for certain routes, reports Reuters. The concessions came after a three-year investigation by the European Commission which warned of possible harm to passengers on routes from New York to Amsterdam and Rome, as well as premium travelers on the Paris to New York route.

The industry looks to global alliances such as SkyTeam, Oneworld and Star Alliance to drive growth as they allow carriers to set up revenue-sharing ventures on key markets, while getting around the foreign ownership curbs that exist in many countries.

The airlines agreed to forfeit landing and take-off slots on routes to New York as well as grant access to competitors on the Amsterdam-New York and Rome-New York routes, notes the Atlanta Business Chronicle. Additionally, the alliance offered competitors access to frequent-flier programs and to sell tickets on their flights. SkyTeam alliance members share profits and losses in addition to coordinating the capacity, schedules, prices and revenue management of their transatlantic operations. The agreement with the EU will be valid for 10 years.