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Alitalia Joins SkyTeam

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Alitalia and Air France will share the total net operating income (EBIT) of the bundle ... level) expected to materialise from the Alliance with Air France ... – PowerPoint PPT presentation

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Title: Alitalia Joins SkyTeam


1
Alitalia Joins SkyTeam
27 July 2001
2
Key Points
  • Alitalia joins SkyTeam, one of the major global
    airline alliances in the world
  • Strategic bi-lateral commercial partnerships
    between Alitalia, Air France and Delta Air Lines
  • Significant synergies identified
  • 27 July 2001 effective date, subject to
    regulatory approvals

3
Alitalia Joins SkyTeam
  • SkyTeam is a worldwide alliance in the airline
    industry for passenger and cargo services
    primarily
  • System code-sharing
  • Use of common customer standards
  • Co-ordinated route development
  • Frequent flyer program co-ordination and
    integration
  • IT systems joint future developments
  • Definition and implementation of cost saving
    opportunities and other benefits

4
SkyTeam Partners
Destinations 64 206 61 376 77 107 Countries 7 91 3
8 64 29 53 Daily Departures 337 1,700 134 5,280 40
3 869 Aircraft 69 238 30 601 113 162 Hubs 4 3 1 5
3 2 Passengers Carried (mn) 10.6 42.4 2.4 120.0 2
2.1 26.6 Employees 7,414 64,700 4,135 74,000 18,17
9 23,500
Source Published information
5
Market Position vs. Other Alliances
  • SkyTeam is the worlds second largest alliance in
    terms of passenger share

(1)
RPK (bn) 342.6 487.7 646.8 222.5 116.5 RPK
Share 11.3 16.1 21.3 7.3 3.8 Passengers 204.
8 197.7 314.0 90.3 64.3 Passenger
Share 12.3 11.9 18.9 5.4 3.9 Revenues
(bn) 39.5 50.5 80.6 20.2 17.3
Source Airline Business, 2001 - Year 2000
figures (1) Including Alitalia
6
Alitalia-Air France Alliance
  • Framework
  • Creation of a European multi-hub system based on
    Paris Charles De Gaulle, Milan Malpensa and Rome
    Fiumicino
  • Increased co-operation through Joint-ventures
  • Long term and far reaching Alliance, minimum
    duration 10 years
  • Passenger Business Agreement
  • Full Joint-venture on Italy France bundle from 1
    April 2002
  • Extensive use of code-sharing on a free-flow
    basis
  • Full reciprocal FFP worldwide
  • Product and service alignment, but separate
    brands
  • Jointly define role of respective regional
    airlines

7
Alitalia-Air France Alliance
  • Cargo Business Agreement
  • Common network design and sales and marketing
    strategy
  • Increased co-operation through Joint-Ventures
  • Other Agreements
  • Handling, Maintenance, IT and other business
    agreements through Joint-ventures where
    appropriate

8
Italy-France Bundle
  • Full Joint-Venture on Italy-France bundle from 1
    April 2002
  • Targeting 50/50 capacity sharing in approximately
    four years
  • Alitalia and Air France will share the total net
    operating income (EBIT) of the bundle
  • 60 for AF, 40 for AZ in Year 1
  • 55 for AF, 45 for AZ in Year 2
  • 50 for AF, 50 for AZ from Year 3 onwards
  • Fleet operations principles jointly determined
    based on operational optimisation
  • Sales forces separate and independent, but
    policies co-ordinated
  • Co-operate to organise commercial activities
    outside respective home markets

9
Alitalia-Delta Air Lines Alliance
  • Co-ordination of schedules and operations in
    order to maximise connections
  • Extensive use of code-sharing
  • Reciprocal participation in each others FFP
  • Proration of Passenger fares
  • Co-operation on facilities and passenger handling
  • Lounge exchange program
  • Common promotion and advertising
  • Alitalia, Delta Air Lines, Air France and Czech
    Airlines will apply for Antitrust immunity to
    deepen the co-operation and achieve a higher
    degree of benefits on the transatlantic traffic
  • Aiming at Anti-trust immunity among Alitalia,
    Delta Air Lines, Czech Airlines and Air France by
    January 1, 2002

10
Economic Benefits
  • Estimated synergies (at EBIT level) expected to
    materialise from the Alliance with Air France
  • Euro 130 million by 2003
  • Euro 180 million by 2005
  • A minimum of US 15/18 million from
    Alitalia-Delta Air Lines partnership at EBIT
    level in the first year of co-operation with
    current network and before any immunisation is
    obtained
  • expected to be higher in the following years

11
Conclusions
  • Alitalia joins SkyTeam, one of the major global
    airline alliances in the world
  • Strategic bi-lateral commercial partnerships
    between Alitalia, Air France and Delta Air Lines
  • Significant synergies identified
  • 27 July 2001 effective date, subject to
    regulatory approvals
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