SkyTeam NewsFlash – February 2009

SkyTeam, the global airline alliance partnering eleven members – including Aeroflot, Aeroméxico, Air France, Alitalia, China Southern Airlines, Continental Airlines, Czech Airlines, Delta Air Lines, KLM, Korean Air, and Northwest Airlines – and three Associate carriers – Air Europa, Copa Airlines and Kenya Airways – sets itself apart by offering an exclusive experience for all passengers. Issued monthly, SkyTeam NewsFlash provides media with key updates and insights on alliance activities.

New Member Recruitment: An Inside Look

As SkyTeam looks towards growth opportunities for 2009 and beyond, new member recruitment provides an opportunity to expand on core alliance strengths such as consistent service, seamless connections and an enhanced network. However, new member recruitment can be a lengthy process due to requirements imposed, in part, to ensure that SkyTeam passengers continue to receive the key alliance benefits they’ve come to expect.

SkyTeam has put in place a comprehensive recruitment process to ensure that all quality service and safety measures are met before a member may join the alliance. Not only does it ease assimilation for the new member, but it ensures our SkyTeam passengers can enjoy the benefits of expanded membership as quickly as possible when the new airline is on board.

In this edition of NewsFlash, SkyTeam is sharing behind-the-scenes insight into the alliance’s recruitment process so customers may better understand the process.

The First Steps

To identify potential candidates, SkyTeam first explores opportunities for network growth and then begins to pursue relationships with the specific carriers of interest that operate within the targeted region. Although SkyTeam receives queries from individual carriers interested in joining the alliance, SkyTeam strategically selects candidates that will build upon its core strengths and supplement the alliance’s network reach.

For example, SkyTeam was committed to building its network in China, given the vast growth potential of the Chinese market. SkyTeam identified China Southern Airlines as the largest mainland Chinese carrier with a main base at its Guangzhou hub, one of China’s most affluent regions. After considering China Southern’s reputation and bilateral alliances with SkyTeam members Air France, Delta Air Lines, and Korean Air, SkyTeam was able to classify China Southern as a strong potential candidate.

In terms of target markets for future recruitment, SkyTeam is focused on enhancing its network in Southeast Asia, India and Brazil, and is working towards developing relationships with key carriers in each of the regions.

On Track for Membership

After initial talks with the alliance, the carrier may sign a memorandum of understanding with SkyTeam as a first step on its path to membership. This is a preliminary agreement for the candidate to undertake “exclusive discussion” to be a part of the alliance.

Once both SkyTeam and the individual carrier decide to further pursue the relationship, the candidate then signs the Global Airline Alliance Adherence Agreement (GAAAA) which indicates that the carrier is on track for official alliance membership. The GAAAA outlines the carrier’s commitment to meet a set of standards to become an officially recognized member.

SkyTeam designates a team, often led by an airline with which the candidate already has a bilateral agreement, to guide the candidate through the recruitment process. Additionally, all of the SkyTeam members work collaboratively to assist the candidate in achieving member status in what is called a “Transition Support Team”. For example, SkyTeam members will physically send team members to the individual carrier’s home base to work with them in meeting all of the SkyTeam requirements. By starting the collaboration early, by the time the carrier is officially a member, representatives have already been working with representatives from other SkyTeam member airlines for several months.

The set of standards required for membership vary from passenger-facing to product-focused, such as meeting bilateral codesharing, frequent flyer and lounge agreements.

One of the reasons the alliance has so many membership requirements in place is to make sure that SkyTeam customers benefits will be delivered. By requiring its recruits and new members to meet such rigorous criteria, SkyTeam ensures that it will continue to build on its own excellence standards as the alliance grows.

Official Membership

To determine whether the carrier has fully met all of the requirements, SkyTeam conducts a comprehensive audit with various safety and quality factors. Based on the audit findings, SkyTeam’s Governing Board makes the final decision on membership. Because of SkyTeam’s broad and loyal international customer base, new members benefit from stronger brand awareness and a better brand positioning internationally as a result of joining the alliance. Additionally, SkyTeam’s passengers benefit from access to the alliance’s expanded global network, access to SkyTeam lounges and the ability to earn and redeem miles on all flights operated by all SkyTeam carriers.

Expanding the Associate Airline Program

The SkyTeam Associate Program was launched to serve carriers in strategic regions who are interested in becoming affiliated with SkyTeam and its alliance benefits. The Associate recruitment process is very similar to the member recruitment process in terms of identifying candidates and imposing requirements and responsibilities on the carrier prior to joining, with an important difference: the Associate is sponsored by one Member throughout the transition. Once an Associate carrier is officially recognized as part of SkyTeam, its passengers will receive the same benefits offered to passengers traveling with the 11 current SkyTeam member airlines.

The Romanian airline, TAROM, is on track to join the SkyTeam alliance as an Associate airline in late 2009. SkyTeam signed an Alliance Associate Adherence Agreement (SAAAA) with the airline in May 2008 and is now making progress with its sponsor Air France towards joint IT commercial systems and FFP.

SkyTeam looks forward to sharing more recruitment news soon.

Statement on Air France-KLM and Alitalia

The members of SkyTeam are delighted that Alitalia and Air France-KLM have reached an agreement to launch a new strategic partnership, cemented by Air France-KLM taking a minority stake in Alitalia. Alitalia has been an important member of SkyTeam since joining the alliance in 2001. The members look forward to continuing the relationship with a rejuvenated Alitalia, strengthened in its domestic market via the acquisition of Air One, and who will be in a position to play a key role in international markets thanks to its extended cooperation with Air France-KLM.