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. Last Updated: 07/27/2016

Air France Links With U.S. Firms

PARIS -- Air France is linking up with two major U.S. carriers, Delta Air Lines and Continental, in a transatlantic alliance crucial to its ability to keep up with its major European rivals.


The French state airline said Wednesday it had signed separate letters of intent for cooperation with Delta and Continental after a lengthy search for a U.S. partner.


The long-awaited agreements mark a strategic step in Air France's development and its effort to tap the huge U.S. travel market to feed its global network, while the U.S. companies will carry the French airline's passengers on their domestic routes.


"These agreements crystalize the company's wish to forge a network of global alliances," Air France said in a statement.


The alliances allow so-called code-sharing arrangements between Air France and the U.S. companies, which is a low-cost way of gaining more customers without direct investment.


It means passengers can be issued with through-tickets by one carrier to be used on its partner airline, making it possible for airlines to feed passengers to each other. The companies will also harmonize their flight schedules, share a common frequent flyer program and provide ground facilities.


Delta operates from its hub at Atlanta, Georgia. Continental works from Houston, Texas, and Air France uses Paris' Roissy-Charles De Gaulle airport.


Air France gave no financial details but a spokeswoman said they were expected to bring the loss-making airline savings of $100 million a year.


The airline racked up a net loss of more than two billion francs ($383.9 million) last year after heavy provisions for restructuring, but has said it hopes to be in profit this financial year.


German airline Deutsche Lufthansa AG started code-sharing flights with United Airlines in 1994, paving the way for other high-profile cooperation deals.


American Airlines this year agreed on a controversial alliance with British Airways PLC, but regulatory approval has been held up by a row between the British and U.S. governments over an "open skies" agreement.