KLM, NORTHWEST LIKELY TO BOOST CARGO TIES

KLM, NORTHWEST LIKELY TO BOOST CARGO TIES

The collapse of the proposed alliance between four European airlines is likely to spur greater cooperation in cargo between KLM Royal Dutch Airlines and Northwest Airlines, officials of the two carriers said.

KLM and Northwest have developed a close relationship on the passenger side this year, primarily in the form of code-sharing on trans-Atlantic flights, but plans for closer ties in cargo were put on hold, pending the outcome of merger talks between KLM, Scandinavian Airlines System, Swissair and Austrian Airlines.The Alcazar project, as it was called, fell apart in mid-November because of a dispute over the selection of a U.S. partner, with KLM holding out for Northwest, largely because of its strong cargo orientation, while Swissair insisted on Delta Air Lines, with which it has a 5 percent cross-holding arrangement.

"The collapse of Alcazar removes any hesitancy about going ahead. KLM has a very heavy focus on cargo. They wanted an airline positioned with them to develop cargo routes globally," said James E. Oden, Northwest's director of cargo marketing and sales programs.

"I think we'll see more progress in the next few months than we have in the previous year," Mr. Oden added.

"I'm very positive about the next move with Northwest," said Jan Meurer, KLM's vice president and cargo manager for the Americas. He said he expects the two airlines will come up with a plan within the next two months.

Brian Clancy, a cargo analyst with MergeGlobal Ltd. in Alexandria, Va., also said he expects the two carriers to move ahead on cargo.

"KLM is savvy on the cargo side. They realize the leverage Northwest can give them," he said.

Northwest is the only U.S. passenger carrier with freighter aircraft, all of which operate on trans-Pacific routes. Closer cooperation would enhance KLM's goal of becoming a global carrier.

Meanwhile, SAS is moving ahead with plans for a new cargo terminal that it will share at Newark International Airport with Continental Airlines.

Henric Nauckhoff, the carrier's U.S. cargo manager, said SAS officials gave the go-ahead to complete negotiations on the project even before Alcazar collapsed.

Mr. Nauckhoff said he expects final approval by the SAS board in February and by commissioners of the Port Authority of New York & New Jersey, which operates the airport, either that month or in March.