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Partnerships create unique opportunities to explore new and potentially valuable ways of reducing expenses. According to John Dasburg, president of Northwest Airlines, joint marketing programs generated most of the success in Northwest’s partnership with KLM. A less heralded example of cooperation came from joint purchasing activities.
Since early 1994, Northwest and KLM have engaged in sixty-nine successful joint procurement projects producing total savings of $31 million. These projects, all nonstrategic in scope, reduced Northwest’s expenses by $4.6 million in 1995, and future annual savings are estimated at $15 million to $20 million. Furthermore, both airlines continue to expand cost-saving activities including sharing warehouse space at Schipol Airport in Amsterdam and joint ticketing and checkin counters at various other airports.