Delta Air Lines Inc. is investing €375 million (about $438 million) to buy a 10 percent stake in Air France-KLM, deepening ties that exist through its longstanding joint venture with the European company.
Delta has taken minority stakes in many of its international partner airlines in recent years, gaining decision-making power and deeper integration in profitable regions like the United Kingdom or promising markets like China.
It’s no different this time, with Delta gaining one Air France-KLM board seat if the measure is approved by shareholders, boards and governments. The partnership dates back to 2009, with the addition of Alitalia in 2010, according to Delta. Air France and KLM announced plans to merge in 2003.
Delta also announced that Air France-KLM is aiming to take a 31 percent stake in Virgin Atlantic, the London-based carrier of which Delta already owns 49 percent. If ownership dilution occurs on the Virgin Atlantic side, Delta would gain control of that operation and solidify its hold on lucrative but tightly controlled U.S.-London routes.
CEO Ed Bastian said the “dynamic global landscape” makes the partnerships vital. Already this year Delta has taken a 49 percent stake in Aeromexico and launched a joint venture with Korean Air.