Originally Posted by
CVG767A
Somebody on here mentioned that regardless of the ASM split between us and AF/KLM/AZ, the revenue split will be 50/50. Is that true? If so, it would seem that Af/KLM/AZ would want to get their flying into compliance ASAP. They are bearing the production costs of 58% of the flying, yet only getting 50% of the revenue.
Yes Profits or losses are shared 50-50 on all of the bundle one flying. We were in compliance prior to AZ being added to the AF side of the mix. When they were added our share of the flying was 47.2%. (Read less than 50-50) Due to the fact that the initial AF JV had a 50 50 split, DAL demanded that it be this way with the addition of the AZ EASK's that were being flown day one.
Because all parties agreed to this, a new three year reporting window was stated in April of this year and will not end until March 2014. At any time that the EASK balance is above 49.75% the parties are considered to be in compliance of the new agreement and a new three year reporting window starts. There is no look back to the previous years. Current projections show us being there in 2013. Currently we are on a three year average of about 48.3%.
City pairs like SEA-CDG are going to us because they want the balance to be in compliance for the reasons you stated.
This JV is a percentage only JV it does not have EASK floors. We could conceivably get in to compliance as both parties pull capacity. The change from our percentage of 51.7% to 50% and a new three year reporting window that includes AZ, were agreed to in MOU 14. It modified LOA 16.