Delta Air Lines, Inc. (NYSE:DAL) has announced expansion of its deal with China Eastern Airlines. The new agreement will create better air traffic revenues for both the companies as they aim to solidify their services on China-US routes and enhance flying experiences of passengers. The financial aspect of the agreement includes $450 million payment for 3.55% stake of China Eastern stock for Delta Air Lines, Inc.
According to China Eastern Chief Executive Officer, Shaoyong Liu, the new agreement is a strategic move by China Eastern to reform, explore, and develop ‘mixed ownership economy.’ The agreement will also provide the necessary visibility for the Chinese airliner to develop globalized presence, the top executive claimed.
Delta Air Lines, Inc. (NYSE:DAL) and China Eastern agreement is aligned with their vision to build global presence and complies with ‘joint strategic blueprint.’ The individual route networks are to be optimized, while flight services and relevant businesses opportunities are to be leveraged to connect two of the largest economies, and airlines in the world.
The relationship between Delta Air Lines and Chinese Eastern appears to have matured over their years of sustained partnership. The new phase of agreement will allow the companies to create profitable ‘franchise’ along with ‘world-class customer service,’ according to Richard Anderson, CEO of Delta Air Lines, Inc. (NYSE:DAL).
In recent times the strategic partnership has expanded their offerings in the US-China route with the latest addition of Los Angeles-Shanghai route. The two airlines have ensured connections between are more convenient and seamless by re-locating Delta to Terminal 1, at Shaghai Pudong Airport, closer to China Eastern and Shanghai Airlines. Joint corporate sales have been effective in providing more competitive products to the US and Chinese flying community. Delta Air Lines, Inc. (NYSE:DAL), as part of this agreement will invest $450 million in china Eastern’s H-shares.
Delta Air Lines, Inc. (Delta), incorporated on March 16, 1967, provides scheduled air transportation for passengers and cargo throughout the United States and around the world. Its route network is centered on a system of hub and international gateway airports that it operates in Amsterdam, Atlanta, Detroit, Los Angeles, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City, Seattle and Tokyo-Narita. Each of these operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub or gateway to domestic and international cities and to other hubs or gateways. The Company’s segments include its Airline segment and Refinery segment.
The Company has operations in six continents. The Company’s airline operations also include aircraft maintenance, repair and overhaul (MRO), staffing services for third parties, vacation wholesale operations and its private jet operations. Its MRO operation, known as Delta TechOps, serves aviation and airline customers around the world. Its staffing services business, Delta Global Services, provides staffing services, security, training services and aviation solutions. Its vacation wholesale business, MLT Vacations, provides vacation packages to third-party consumers. Its private jet operations, Delta Private Jets, provides aircraft charters, aircraft management and programs allowing members to purchase flight time by the hour. The Company’s tickets are sold through various distribution channels, including delta.com and mobile, telephone reservations and brick and mortar, and online travel agencies.
Airline
The Company’s Airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world and other ancillary airline services, including maintenance and repair services for third-parties. Its flight equipment forms one fleet, which is deployed through a single route scheduling system. The Company leases most of the land and buildings that it occupies. Its aircraft maintenance base, various computers, cargo, flight kitchen and training facilities are located at or near the Atlanta airport, on land leased from the City of Atlanta. It leases ticket counter and other terminal space, operating areas and air cargo facilities in airports that it serves. It also leases marketing, ticketing and reservations offices in certain locations for varying terms.
Refinery
The Company’s Refinery segment provides jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third-parties. The refinery primarily produces gasoline, diesel and jet fuel. Its wholly owned subsidiaries, Monroe Energy, LLC and MIPC, LLC (collectively, Monroe), own and operate the Trainer refinery and related assets in Pennsylvania. The facility includes pipelines and terminal assets that allow the refinery to supply jet fuel to its airline operations throughout the Northeastern United States. Under multi-year agreements, Monroe exchanges the non-jet fuel products the refinery produces with third-parties for jet fuel consumed in its airline operations.
The Company competes with American Airlines, United Airlines, Alaska Airlines, JetBlue Airways and Southwest Airlines, Spirit Airlines and Allegiant Air, Emirates, Etihad Airways, Qatar Airways, SkyTeam, the Star Alliance and the oneworld alliance.
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