By Karen E. Thuermer, AJOT In recent weeks, fuel prices seem to easing, but this has not stopped the impact its high price is having on air carriers. With the cost of jet fuel jumping almost 70% over the past year, the airline industry is facing a realignment, one which experts such as Michael Wisbrun, Chairman Joint Cargo Management Committee, Air France-KLM Cargo (AF-KLM Cargo) believes is going to result in a rash of mergers. Recently, rumors surfaced about a UPS take over of Dutch rival TNT. And soon lawmakers in Washington will begin examining the “strategic alliance” between cargo giants DHL and UPS. American Airlines is teaming up with Iberia and British Airways to expand their global cooperation and partner on flights between North America and Europe. The airlines say the alliance will give consumers better connections, as well as improved flight schedules. The carriers signed a joint business agreement, and are filing for antitrust immunity from the US Department of Transportation and appropriate European agencies. If granted antitrust immunity, the alliance would create the world’s biggest airline AF-KLM Cargo, itself, is seeking full control of Amsterdam-based Martinair and has begun lobbying the European Commission to obtain clearance for a 100% holding. Martinair is owned jointly by KLM and Danish shipping group Moeller-Maersk. “We want to strengthen our basis,” commented Wisbrun during a press conference held in Paris in July. “Martinair can integrate and bring better profitability to our customers.” On June 2, AF-KLM Cargo and China Southern, a SkyTeam member, signed a framework agreement setting the base for a Sino-European cargo joint venture project. “If we are successful, we will get closer to what could open the door to creating a separate airline,” Wisbrun says. The new airline, which would be based out of Guangzhou and be called AE (Asia Europe airline), would fly intra-Asia and cover the globe between China and the United States and China-Europe. “It will have its own aircraft,” says Wisbrun. China Southern, itself, has operates China’s largest air fleet. It will join with Air Bleu, Ltd., an airline controlled by the AF-KLM Group, and will hold 75% of AE and 25% of Air Bleu. “This project clearly combines the strengths of both companies in the cargo industry and represents the basis for delivering long-term value not only to AF-KLM and China Southern but to our customers as well,” Leo van Wijk, Deputy Chairman of the AF-KLM Group adds. Today, Air France operates one of the youngest fleets of aircraft in Europe. “In October, the carrier is launching three 777 freighters out of CGD,” Wisbrun says. If the joint venture is successful, it will encompass six 777 freighters, two 747s, and two to four A300 freights for the inter-Asia market. Currently, the carriers only service the market with belly space. China Southern has code share agreements with both Air France and KLM via those airlines respective hubs of CDG and Amsterdam Schiphol (AMS). DELTA-NORTHWEST MERGERAF-KLM Cargo executives are also eager for the Delta Air Lines and Northwest Airlines merger, which, on August 6 received unconditional clearance from the European Commission. “Approval from the European Commission for the merger is another important step toward completing our pro-competitive merger with Northwest,” says Delta CEO Richard Anderson. “The Delta-Northwest merger will combine two complementary networks to offer customers greater access to destinations across the globe. We continue to work closely with the US Department of Justice and remain confident that we will be able to finalize the merger by the end of the year.” That merger would solidify AF-KLM’s position in the US market. While the escalating price of jet fuel, coupled with the downward spiral of the US economy has negatively impacted the domestic business of American carriers, trans-Atlantic business still remains good. Nevertheless, it’s flooded with too much capaci