Air France, Delta create trans-Atlantic flights JV

PARIS: Air France-KLM and Delta Air Lines Inc said on Wednesday they would pool revenues and costs on trans-Atlantic flights in a new joint venture that would take effect in April 2008.

In a statement ahead of a news conference in Paris later on Wednesday, the two airlines, who are already code-sharing partners, said they expected the venture to initially generate revenues of $1.5 billion a year rising to $8 billion later.

They will team up on routes linking major UScities and London's Heathrow airport in a direct challenge to rival British Airways Plc . Air France told analysts on Monday it planned a new direct route from Heathrow to Los Angeles and would use Heathrow slots to serve nine US destinations.

The joint venture had been expected with a view to the Open Skies pact set to liberalise transatlantic rules next Spring.

The aim is to tap into sprawling US. domestic networks held by the three U.S. carriers, and link these with Europe's busiest airport.

Business travellers crossing the north Atlantic are BA's biggest source of profits.