Delta Air Lines Inc. is proposing a new tie-up with Korean Air, continuing its ongoing strategy of launching joint ventures with foreign partners as it has done with Aeromexico, Virgin Atlantic and Air France-KLM.
Already codeshare partners in the SkyTeam alliance, the airlines announced the move just before Delta restarts its flight to Seoul from Atlanta in June. Korean Air also has a nonstop flight to Atlanta which will continue, even as it begins third and second roundtrips to Los Angeles and San Francisco, respectively.
Codesharing means Delta can sell Korean Air flights as its own, and vice versa. That means a Delta traveler can book a single ticket on Delta’s website but transfer in Seoul on Korean Air to destinations throughout Asia. Meanwhile, Korean Air travelers arriving in Atlanta are able to connect to Delta’s extensive domestic and international network. They share revenues from the flights, but each one is operated independently.
The joint venture would deepen this partnership, with both airlines sharing both costs and the revenues while also coordinating schedules to improve connection times and allowing travelers to earn frequent flyer benefits on both airlines.
The combined network would have 290 destinations in the Americas and more than 80 in Asia, according to a Delta news release.
Korean Air’s Chairman and CEO, Cho Yang-ho, signed a memorandum of understanding to pursue the joint venture with Delta CEO Ed Bastian this week. Mr. Cho framed it as a victory for the country and its busiest airport.
“With this agreement, we will reinforce Incheon airport’s position as a major international hub in Northeast Asia and support the growth of Korea’s aviation industry,” Mr. Cho said in the release.
The deal is subject to regulatory approval. The airlines asserted in the news release that the move would improve competition.
It’s unclear what effect the move will have on Delta’s plans to partner up with Shanghai-based China Eastern, in which Delta invested $450 million to buy a 3.55 percent stake in 2015. Delta CEO Ed Bastian has called Shanghai the “capital of Asia” and Delta’s Asia “hub of the future” but has lamented the restricted number of available routes there in absence of an Open Skies pact.
One of Korean Air’s strengths is its connectivity to China.
Learn more about Delta’s JV strategy at an upcoming French-American Chamber of Commerce event.