Delta to Take Ownership Stake in China Eastern, Expand Partnership

Delta Air Lines announced an expansion of its partnership with China Eastern Airlines that includes taking an ownership stake in the airline.

The partnership calls for the two carriers to “better connect” the two airlines’ route networks as well as for Delta to invest $450 million to acquire a 3.55% stake in China Eastern.  The two airlines said they will make joint investments “in the customer experience” as well, in addition to working together on joint corporate sales.

Combined, the two carriers, including China Eastern’s Shanghai Airlines subsidiary, currently operate 30 domestic codeshare flights in the United States, 43 domestic flights in China, and seven routes linking China and the United States.  China Eastern operates four non-stop flights from Shanghai to the United States and Delta offers six non-stop flights to China.

Delta has hosted China Eastern managers at its headquarters in Atlanta for the purpose of sharing best practices for the past three years and plans to continue this practice.

Once the deal closes, following the approval of both carriers’ boards of directors and the execution of a final marketing agreement, Delta will be entitled to an observer seat on the China Eastern board of directors.

“The cooperation of the parties is based on a global vision and joint strategic blueprint,” said Shaoyong Liu, China Eastern’s CEO.

(Photo: Accura Media Group)