(Adds details on jv, comments on Alitalia, Iberia)
PARIS (Thomson Financial) - Air France-KLM has finalised a joint venture agreement with Delta Air Lines over the operation of transatlantic flights from April 1, chief operating officer Pierre-Henri Gourgeon told Les Echos.
'It will allow us to go from the barter system of the current code-sharing agreements to a more integrated operation, with decisions taken jointly and a sharing of costs and receipts,' Gourgeon said.
The joint venture between the two companies, already partners in the Skyteam alliance, is to be signed later this month, Les Echos said.
The agreement is in response to the open-skies agreement on air traffic liberalisation, which will introduce greater competition on transatlantic routes from next April.
As a first stage, the partners are to share flight slots between Delta's US hubs (Atlanta, New York-JFK, Cincinnati and Salt Lake City) and Paris-CDG and Lyon in France, as well as all routes out of London.
In the second stage from 2010, the joint venture will be extended to all transatlantic routes, including those operated by Dutch-based KLM and its US-based commercial partner Northwest Airlines.
But for the joint venture to be widened, Air France-KLM will have to obtain an antitrust authorisation from the US. Having lost its application in 2005, the group has submitted a new request that is due to be examined by the end of the year, Les Echos said.
The newspaper had reported at the end of July that Air France-KLM and Delta were still in talks over a joint venture, with a deal possible for the autumn.
Regarding Air France-KLM's interest in Alitalia, Pierre-Henri Gourgeon said it was 'extremely cautious' about the matter. 'We are ready to talk, but not at any price,' he said.
Gourgeon specified conditions that Alitalia's restructuring plan be sufficient to re-establish its profitability, that a coherent industrial strategy be developed for both sides, and that enough synergies be created in relation to the costs involved.
'If we invest, for example, one bln euros, there would have to be at least 200 mln in synergies per year,' he said.
Gourgeon said he expects the talks with Alitalia to begin 'fairly quickly, probably in October' and be concluded by 'the summer of 2008'.
Regarding Air France-KLM's declared interest in Iberia, he said this represented more of a 'market opportunity' given that certain shareholders have decided it could be the moment to sell. 'But they could equally decide to wait if they think the share or offer price are too low,' he added.
'It's thus a market opportunity that we are trying to tie to an industrial strategy, if we can find the right partners,' Gourgeon explained. tfn.paris@thomson.com gt/jms/gt/ra COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.