Delta Airlines Deepens Ties with China Eastern by Signing a Cooperation Agreement
Delta Air Lines Inc. along with China Eastern Airlines Corp. deepens their cooperation as officials of the two airlines sign a cooperation agreement giving Delta a stronger foothold in the world’s fastest growing aviation market and allows the Chinese carrier to penetrate in the US market further. Chinese residents can fly to any city that China Eastern services in China to any city that Delta services in the US, it will look like they will be running a single airline but with two different airlines involved.
Both companies are cooperating in area including code sharing, scheduling, revenue management, frequent flyers programs and sales. The announcement is connected to Delta’s plan which was unveiled in July to invest $450 million to get a 3.6 percent stake in China Eastern. The agreement will assist Delta in targeting a country that is said to overtake the US as the biggest air passenger market in the next twenty years. The partnership with China Eastern is part of an industry wide lack of seats that dampens the US carrier ability to increases its prices domestically. Delta’s long term confidence in the Chinese market, pushed them to decide to invest in China Eastern without questions and this cooperation will be the first real trans Pacific alliance.
Delta is serving Shanghai, Beijing and Hong Kong with non stop flights daily from the US and Delta has an Asian hub in Tokyo, but wasn’t able to purchase a stake with the Japanese carrier Skymark Airlines which recently declared bankruptcy. Delta is now placing its focus for growth in Shanghai as China is surpassing Japan as the growth engine of Asia. China Eastern and Shanghai Airlines code share flights with Delta on 30 domestic routes in the US, 43 routes in China and seven routes across the pacific.