KLM Royal Dutch Airlines and Northwest Airlines executives were together this week at the KLM world headquarters in Amstelveen, The Netherlands, to commemorate the 10th anniversary of the joint venture agreement - heralding it as “the longest and most successful alliance in the airline industry.”
“The partnership first started as a codeshare agreement in 1990. After the signing of the Open Skies Agreement between the US and the Netherlands in 1992, the allowance of US anti trust immunity and EU clearance in 1993, we could build on to this. Now it has grown to 237 flights jointly operated by the two carriers between the U.S. and Europe and has created $4 billion annually in shared revenue”, according to KLM’s president and CEO Peter Hartman.
Hartman said the $4 billion annual revenue is a 65% increase from the $2.4 billion collected in the first year of the joint venture agreement, 1997. In this period of ten years capacity increased only by 13%.
Northwest Airlines President and CEO, Doug Steenland, said “the alliance is the longest and most successful partnership in the airline business, as well as among the most profitable—making the Northwest/KLM joint venture the envy of many others in our industry.”
Passengers have also benefited greatly through the alliance—with seamless connections in Amsterdam, Detroit and Minneapolis/St. Paul—and ease of booking for the jointly operated trans-Atlantic flights plus access to additional codeshare flights to 260 cities in the US, Europe, the Middle East, India and Africa. More than 5.5 million passengers are expected to take advantage of the joint venture and codeshare flights this year. Besides the passengers have access to lounges of both airlines and share the benefits of their frequent flyer programs.
The alliance has been a financial boon for both airlines, which share all costs and income equally. The joint venture also created integrated sales forces on both sides of the Atlantic ocean and now applies to each airlines’ cargo business as well.