Etihad does codeshare deal with Air France KLM, and leaves unanswered what the reality of the all of this additional virtuality to Australian travellers will really be.

Etihad has as widely tipped announced a comprehensive codesharing agreement with Air France KLM, but it makes no reference to seeking or needing ACCC approvals for it to be applied to its flights from Australia.

Nor does the announcement make any reference to Virgin Australia, in which Etihad owns a 10% equity, and with which it has an extensive alliance in which the two airlines codeshare (sell each other’s flights) between Australia and its Abu Dhabi hub, from which there is some additional code sharing between the two which is complicated to a degree by other code shares that exist between Virgin Australia and Singapore Airlines.

Which means this is a very interesting announcement, laden with possibilities, but lacking in some details as far as travel originating in Australia is concerned.

For example, it talks about KLM codes being applied to Etihad flights to Australian cities, but makes no reference to Air France codes being similarly applied, even though Air France KLM is a single company which owns a French operation and a Netherlands operation.

Nor does the announcement say very much, except for a passing reference, to Skyteam, which is a global alliance to which Air France KLM belongs, as does Delta, which has  trans Pacific and beyond commercial arrangement and alliance with Virgin Australia, which doesn’t belong to any global alliance, even though it has separate commercial agreements with Singapore Airlines and Air New Zealand, which are members of the Star Alliance, the largest of global alliances.

The key to assessing this announcement (below)  is to read it only as something affecting Etihad, and not extrapolate to Virgin Australia, until or if there is a further explanation from Etihad or Virgin Australia as to what all this virtuality means in reality.

ETIHAD AIRWAYS AND AIR FRANCE-KLM UNVEIL new strategic partnership

*Codeshare agreement extends Abu Dhabi-based carrier’s network to 321 destinations
*Offers significant potential for commercial expansion across Etihad’s airline partnerships.
*Closer ties will enable opportunities for multi-million dollar cost efficiencies
*22.5 million air travellers set to benefit from frequent flyer integration and reciprocal lounge access

Etihad Airways and Air France-KLM have signed a historic agreement to codeshare on flights across the airlines’ networks, the first phase of a much larger strategic partnership which commences on October 28.

The wide-ranging codeshare agreement will see Etihad Airways and Air France-KLM offering joint codes on destinations in Europe, the Middle East, Asia and Australia.  At the same time, Air France is announcing a new codeshare agreement with Airberlin, Europe’s sixth largest airline, in which Etihad Airways holds a 29.21 per cent stake.

James Hogan, Etihad Airways’ President and Chief Executive Officer, said: “This deal, Etihad Airways’ 40th codeshare, marks a momentous milestone for both airline groups and offers countless opportunities to develop an unrivalled commercial relationship.

“It reflects the core elements of Etihad Airways’ 10-year master plan, driven by organic network growth, combined with the forging of strategic codeshare partnerships and minority equity investments in other airlines.

“The linking together of these three components, as we continue to strengthen our bilateral agreements, means all the pieces of our plan are coming together.”

Collectively, the two airline groups expect to carry more than 85 million passengers in 2012.

Air France-KLM and AirBerlin today also announced a mutual codeshare agreement allowing customers of each of the two carriers to fly seamlessly on all the routes operated by the other between France and Germany.

Initially, the agreement between Etihad Airways and Air France-KLM will see the Abu Dhabi-based carrier’s EY code placed on Air France flights between Paris Charles de Gaulle airport and Bordeaux, Copenhagen, Madrid, Nice and Toulouse.

The EY code will also be placed on KLM flights between Amsterdam and Abu Dhabi, Billund, Cardiff, Newcastle, Oslo and Stavanger.

Air France will initially place its AF code on Etihad Airways flights between Abu Dhabi and the Seychelles, the Maldives, Colombo, Dhaka, Kathmandu and Islamabad.

KLM will initially place its KL code on Etihad Airways flights between Abu Dhabi and Sydney, Melbourne, Islamabad, Colombo and Lahore.

Mr Hogan added: “This deal enables us to further extend our global reach and now gives us a combined network of 321 destinations – the largest of any Middle East carrier.

“The agreement also opens up many new markets for our passengers in Europe and reinforces the importance of strategic commercial partnerships as one of the key enablers for accelerated growth of our network.

“Partnerships are delivering a major source of our revenue growth, by extending our network reach and putting our brand directly in front of millions of new customers. This year to date, they are providing 18 per cent of our revenues and will be a major contributor to our sustained profitability growth this year and into the future.”