Delta Moves Closer to Korean Air With New Equity Stake

Jun 20, 2019

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Delta Air Lines is buying a stake in SkyTeam partner Korean Air.

The move cements its existing joint-venture partnership with Korean and furthers Delta’s strategy of buying equity stakes in partner carriers.

Delta said on Thursday that it acquired a 4.3% equity stake in Hanjin-KAL, Korean Air’s largest shareholder, and said that could grow to 10% over time, pending regulatory approvals.

For frequent flyers, the partnership between Delta and Korean is valuable because they typically earn miles and status when flying on either of the two airlines. Another perk for elite travelers is that their status is usually recognized across both carriers.

For the airlines, a joint-venture partnership exempts them from antitrust restrictions that typically would prevent them from coordinating schedules and fares. Airlines can sell seats on each other’s planes and split revenue from flights that operate under such pacts.

Delta and Korean began their joint-venture partnership in 2017, though that came after several years of rumors about discord between the SkyTeam alliance partners. Speculation about the rift between the two seemed to peak in 2013, when Delta dropped Korean to the lowest rung of its frequent-flier partners, reducing how many miles its customers earned on Korean Air flights and halting elite-status accrual altogether.

Now, however, the airlines appear to be in sync and the deal announced Thursday appears to represent a solidifying that partnership.

Delta has equity stakes in several other partners, including Aeromexico, Gol and Virgin Atlantic, among others.

Contributing: Ben Mutzabaugh. Featured image by Alberto Riva/TPG

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