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Delta ends Swiss link
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October 13, 1999: 5:54 p.m. ET
U.S. carrier cancels old alliance to pursue closer ties with Air France, Aeromexico
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LONDON (CNNfn) - Delta Air Lines said Wednesday that it has terminated its alliance with its three original European partners, including Swissair, to pursue closer cooperation with Air France.
The step was widely anticipated in the industry, after the Atlanta, Ga.-based airline signed a wide-ranging strategic alliance with Air France in June.
"It wasn't the world's greatest surprise given that Delta had chosen to join up with Air France," Chris Tarry, airline analyst at Commerzbank in London told CNNfn.com.
Delta also said it has terminated its relationships with Austrian Airlines and Belgium's Sabena - the latter is controlled by Swissair's parent, the SAirGroup.
"Ending the alliance with Swissair, Sabena and Austrian Airlines represents a difficult decision. They are quality airlines, and our alliance has provided outstanding service to our customers and good returns for our shareholders," Delta's chief marketing officer said in a statement.
Reid said Delta and Air France had jointly asked the three carriers to join their alliance, which also includes Aeromexico, but when they declined the links had to be terminated.
Delta will pursue close links with Air France
After the Air France deal in June, Delta's original transatlantic alliance grouping began to unravel quickly. Austrian Airlines said it would join the rival Star Alliance, led by United Airlines and Germany's Lufthansa, last month.
Swissair has also made it known around the industry that it was planning to pursue links with American Airlines. The Swiss carrier confirmed as much in a statement Wednesday, adding that it hoped to announce a deal with American in the next few weeks.
"Swissair has been strengthening its relationship with American over recent months," said Tarry. Any transatlantic link with the Dallas-based carry will inevitably include Sabena and will ultimately lead to a deal with American's major European partner British Airways, analysts said.
The announcement spells the death-knell for the industry's first attempt at a global alliance, dubbed Global Excellence, which was established by Swissair and Delta along with Singapore Airlines in the late 1980s. Singapore signalled the beginning of the end when it indicated it would join the Star Alliance earlier this year.
Tarry believes the latest development should bring to an end a relatively unsettled chapter in airline alliance. Over the last three years most major link-ups have unraveled and made way for new ones.
Swissair confirmed it still held a 4.6 percent stake in Delta and was still planning to sell the shares. SAirGroup's stock closed 0.5 percent higher in Zurich at 322.50 Swiss francs.
Air France shares closed down 0.6 percent at 15.93 euros in Paris.
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Delta Air Lines
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