As all three U.S. legacy carriers have tightened up their
relationships with key global carriers in recent years, Delta, under the
leadership of CEO Ed Bastian, is investing billions of dollars to strengthen
its voice in its partnerships.
The relationship with Air France-KLM is the granddaddy of
Delta's global alliance strategy, dating back to the Northwest Airlines and KLM
joint venture forged in 1993. And this year, Delta upped that game with a 375
million-euro investment to acquire a 10 percent stake in Air France-KLM, also
gaining a seat on its board of directors. Simultaneously, Air France-KLM
announced a 31 percent stake in Virgin Atlantic—Delta already had a 49 percent
stake in the carrier—as the carriers began combining their partnerships into a
single, transatlantic, mega JV, which Bastian projects will be completed in
2018.
This year, Delta also acquired nearly a third of Aeromexico's
shares to bump its stake in that airline up to 36.2 percent; it has options to
increase its share further. Delta began a new JV with Aeromexico this year, as
well.
In all, Delta has invested about $2 billion over the past
five years in partner carriers, which also include China Eastern and Brazil's
Gol. "We're not doing it as airline investors," Bastian told BTN. "We're
doing it to have the greatest impact and influence for our customers as they
travel internationally. We found that while commercial relationships or
contracts are a great start, the real value, the real alignment and the real
investment decisions need to be occurring as owners with similar outcomes."
Delta firmed up other partnerships this year, as well,
including a new one with Korean Air that Bastian said will be the industry's
largest transpacific JV. The U.S. Department of Transportation has given its
consent to that deal, and Bastian expects the Korean authorities will sign off
sometime next year. And just this month, Delta announced a joint business
agreement with Canadian carrier WestJet, bringing its total number of
partnerships to eight.