Joint EuroLegacy/new Gulf corridor Europe-Middle East.

France's Le Figaro reports that Air France/KLM and Etihad are preparing to launch this autumn a "joint enterprise" aimed at establishing a "Europe-Middle East corridor". The venture is expected to include Air Berlin and Alitalia . The two groups are said to be working on the routes, aircraft, pricing and marketing policies and profit sharing. No small task across such a broad spectrum of differences between the players. It's hardly a seamless grouping in  service quality and styles whatever codeshares are stuck over it to confuse unwary customers. The legacy Europeans could certainly learn something from the Gulf carrier's disciplined  and attractive approach to the service business,- if their legacy unions would let them.

The report could also tie in with rumours from East Africa that Etihad and Kenya Airways might do something together, a notion which has more credibility if KLM, the rather passive 26 % owner of Kenya Airways, is also involved.

So who's up to what?

It's difficult to see what Air France and KLM bring to the Etihad party . Etihad ,like Emirates and Qatar, is primarily a sixth freedom carrier, and already has superior products between France, the Netherlands and Abu Dhabi whence there are also quick road connections to Dubai . KLM is  substantially a sixth freedom player at their end of the route as, to a lesser degree,  is Air France. Etihad, with its Air Berlin partner and its own direct services to a multiple European capitals and secondary cities already outflanks the European duo in Europe .Onwards from Abu Dhabi it offers a plethora  of  destinations in the Middle East, eastern and southern Africa , the Indian sub continent, Asia and Australasia. Some of these are in competition with Air France/ KLM s own competing direct services so where is the attraction of this deal for them? Maybe as a low cost way of fighting Emirates and Qatar in particular to places the Europeans have little chance of profitably serving direct?

Etihad may see this joint "corridor"  as a way of holding their own against their Gulf rivals while the Europeans may see hugging Etihad close as a way of keeping their deep pocketed competitor(s) at bay.  If that's the case this relationship would be based on counterbalancing mutual competitors,- not because the parties love each other. A marriage based on sand?

Alternatively the Gulf carrier may see a plethora of alliances and minority shareholdings as a hedge against the possibility that governments, responding to squeals from declining "national carriers",  will revert to protectionism and start to restrict traffic rights to what they see as primarily sixth freedom predators. It's probably too late for that but it's always an emotion-driven risk.

Etihad's growing list of alliances and large and small shareholdings in other carriers shows starkly the difference of approach between them and Emirates. The still growing giant next door in Dubai has chosen to expand by doing its own thing and has just announced another clutch of new destinations and enhanced frequencies.

Some of Etihad's new tie-ups look useful. Air Berlin brings in more German traffic. If Kenya Airways were added it could be useful in expanding Etihad's reach in Africa though the risk for the African airline would be that it helped a powerful competitor to grow in their nest, cuckoo's egg style, until it moved into more of the Nairobi based airline's destinations in their own right. Tough call.