Air France wants Air Berlin alliance change

Air France-KLM Air Berlin and Abu Dhabi's Etihad, the German airline's biggest shareholder, said on October 8 they plan to start connecting their networks from October 28 under an agreement to share some route codes.

Air France-KLM is a member of SkyTeam but Air Berlin is a member of oneworld, which includes British Airways, AMR's American Airlines, Cathay Pacific and Qantas.

Alexandre de Juniac, Air France's chief executive, told Frankfurter Allgemeine Zeitung in an interview published on Monday that a new partnership with Abu Dhabi's Etihad and Air Berlin would have to first learn how to work together and then draw up an assessment after one year.

"With Air Berlin we want to expand the important markets of Germany and eastern Europe. W e know the airline well," de Juniac was quoted as saying.

"Together with it we can defend ourselves better against the low-cost airlines. If w e further work closer together along the way Air Berlin must decide if it would stick to the oneworld alliance or switch to the SkyTeam alliance of AirFrance-KLM," he said.

Asked to comment on de Juniac's comments, a spokeswoman for Air Berlin told Reuters: "The membership in the airline alliance oneworld has developed positively both for Air Berlin and for oneworld. The Air Berlin membership in oneworld is independent of the potential code-sharing with other airlines."

Some analysts said oneworld provides limited scope for expansion for Air Berlin and the German carrier is now likely to get more enmeshed with Etihad's network connections after the latter boosted its stake in it to 29.21 percent last December.

Etihad is not aligned with any of the three global marketing alliances - SkyTeam, oneworld and the Star Alliance, whose members include Deutsche Lufthansa, Singapore Airlines and Air China.

"The primary oneworld carriers operating in Germany have retained their operations at Frankfurt and thus provide little connectivity for Air Berlin's hub operation in Berlin," Morgan Stanley said in a note on October 5.

"We also believe Etihad is proving to have a stronger influence on Air Berlin's strategy than oneworld," it added. (Reporting by Marilyn Gerlach; Editing by Greg Mahlich)