SkyTeam looking to fill in "blank spots" - exec

Tue Jun 22, 2010 6:21pm EDT

* Battle brewing for a foothold into South America-exec

* Africa, India and southeast Asia also focal points

* China Eastern, Vietnam to boost daily flights 10 pct

By Deepa Seetharaman

NEW YORK, June 22 (Reuters) - SkyTeam, the global airline alliance that includes Delta Air Lines Inc (DAL.N) and Air France-KLM (AIRF.PA), is looking for new partners in Latin America, Asia and Africa as it seeks to broaden its network.

Top brass at SkyTeam declined to name the specific carriers the airline network is eyeing, but said the alliance would look for carriers that add to, rather than overlap with, existing routes flown by its 13 member airlines.

"In South America, India and Africa, it is clear there will be a significant battle for positioning to lure good carriers in your alliance," SkyTeam Chairman Leo van Wijk told Reuters on the sidelines of an event celebrating SkyTeam's 10th anniversary.

Airline networks allow members to expand their reach by selling tickets on one another's flights and streamline costs in a variety of other ways, such as combining airport lounges.

The SkyTeam event also marked the beginning of a process to bring China Eastern Airlines (600115.SS) into the alliance. The addition of China Eastern and the newest SkyTeam member Vietnam Airlines will boost the airline network's daily flights by 10 percent, SkyTeam officials said.

Earlier this year, China Eastern also was being wooed by the oneworld and Star Alliance, in a sign of how competition is heating up for airlines with hubs in growth markets.

Japan Airlines JALFQ.PK was also at the center of a contentious fight between Delta and American Airlines, a unit of AMR Corp AMR.N. In February, JAL said it would stick with American's oneworld alliance.

United Airlines parent UAL Corp UAUA.O and Continental Airlines CAL.N are part of Star. Last month, Continental and United announced they would merge to form the world's largest airline, edging out the current industry leader, Delta.

The new United will be strong in Latin America, a region with growing air travel demand, but also few international hubs, making it a difficult market to enter, SkyTeam managing director Marie-Joseph Male told Reuters.

"Our coverage is slightly less than Star Alliance," van Wijk told reporters at a media briefing. "There are some blank spots that we will be focusing on."

SkyTeam is now looking to boost its presence in southeast Asia, India and Latin America. Van Wijk said it was unlikely the global airline industry would see intercontinental mergers, adding it was more likely that alliance ties would deepen.

China Eastern will help expand the alliance's presence in mainland China, an increasingly important market for business travel, KLM Royal Dutch Airlines Chief Executive Peter Hartman said in an interview.

SkyTeam currently flies to seven destinations in mainland China, more than the rival oneworld or Star alliances, Hartman said.

"There are so many possibilities to do JVs (joint ventures) with other partners" in China, Hartman said. He added that the airline could also add destinations where no SkyTeam partners fly. (Reporting by Deepa Seetharaman; Editing by Tim Dobbyn)

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