US airlines propose marketing triad

Tuesday, 27 Aug, 2002 0

Northwest Airlines, Continental Airlines and Delta Air Lines hope to codeshare on flights, expand lounge access for passengers and introduce reciprocal arrangements on their frequent flyer schemes. The airlines have signed a marketing agreement, which would also simplify ticketing, check-in and luggage handling procedures.

All three airlines have strengths to bring to the agreement. Northwest has a solid domestic route system, particularly in the Mid West US, and numerous services to Asia. Continental offers flights to a number of UK destinations, as well as numerous Latin America destinations, including 19 in Mexico. Delta has an extensive route system around its Atlanta hub in the South and South East US as well as a strong presence in the North East corridor. Delta is also a member of the SkyTeam alliance, which could bring further codeshares in Europe, Asia and Latin America.

A statement by Continental said: “Under the agreements, Continental will have the ability to join the SkyTeam alliance. The expanded co-operation is strategically important because it will enable Continental more effectively to access new revenue sources and compete with carriers in other alliances such as Star and Oneworld”.

A statement from Northwest was more cautious regarding the relationship with SkyTeam. “Northwest, Continental and Delta will engage in discussions with their respective European carrier partners regarding trans-Atlantic co-operation and inclusion of the SkyTeam alliance”.

Northwest president Doug Steenland said: “This agreement is a big plus for business travellers who demand schedule convenience”. Delta chairman and chief executive, Leo Mullin said: “The initiative is pro-competitive on two fronts. First, it will allow participating carriers to compete for additional passengers and revenues in markets not otherwise accessible to them. Second, the proposal will enable Delta, Continental and Northwest to compete on a more equal footing with United Airlines and US Airways, which announced a similar agreement earlier this summer”.

This agreement builds on an alliance between Northwest and Continental, created in 1998. The proposal awaits review by the Department of Transport and approval from organisations representing Delta and Northwest pilots.

Announcement of the agreement comes shortly after TravelMole reported that the “hub and spoke” model of US airlines, where flights go in and out of one main airport, was no longer working. In the report, industry expert, Mark Riseley of research and advisory body GartnerG2, said: “The trouble with hub and spoke airlines is that they have a tendency to bloat and become inefficient”.