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Delta and Aeromexico Create Enhanced Commercial Alliance

Long-term, exclusive alliance enables industry-leading U.S.-Mexico partnership

Delta deepens ties with $65 million strategic investment in Aeromexico

Airlines to expand maintenance, repair and overhaul capacity creating largest airline MRO facility in Mexico

Aug 10, 2011

ATLANTA and MEXICO CITY, Aug. 10, 2011 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) and Grupo Aeromexico (Mexico: AEROMEX.MX) today announced a tentative agreement for a long-term, exclusive commercial alliance. Under the agreement, Delta and Aeromexico will expand cooperation to leverage each other's strengths and link Delta's expansive network with Mexico's largest passenger network. As part of the agreement, Delta also will invest $65 million in Aeromexico.

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"Aeromexico has been a strong partner for Delta in Mexico and Latin America, and this reinforces our relationship," said Delta Chief Executive Officer Richard Anderson. "By forming an exclusive long-term commercial partnership, we will leverage the strengths of our two networks to provide expanded customer benefits and build the foundation for a joint venture to better serve the U.S. and Mexico marketplace."

Following a successful restructuring in 2009 and subsequent public stock offering, Aeromexico has reported strong financial results, including its highest operating margin in 15 years at 10.4 percent for the June quarter 2011.

According to the US Department of Commerce, goods traded between the U.S. and Mexico in 2010 totaled nearly $400 billion, making Mexico the third largest trading partner for the U.S.

"The expanded agreement with Delta will undoubtedly allow us to solidify the commercial alliance we have been building together for several years now," said Aeromexico Chief Executive Officer Andres Conesa. "We will work with Delta to offer more options for our customers, including greater access to Delta's global network."

The new agreement between two of its founding members strengthens SkyTeam's position as the only global alliance with a full-service, Mexico-based international carrier and expands SkyTeam's presence in fast-growing Mexican and Latin American markets.

Exclusive U.S.-Mexico Alliance

Along with the current agreement that offers customers reciprocal access to airport lounges as well as the ability to accrue and redeem flight awards, customers will enjoy soon-to-be-available benefits from the deepened alliance between Delta and Aeromexico, including:

  • Network-wide codesharing to include all Delta and Aeromexico flights between the U.S. and Mexico as well as flights within the carriers' domestic networks and to other key international destinations;
  • A coordinated sales team that offers joint contracting to corporate customers allowing enhanced access to the combined networks;
  • Expedited call handling for Elite customers through a new, integrated process; and
  • The ability for Elite customers to reserve preferred seating via the carriers' reservations centers.

Future benefits of the enhanced alliance will include:

  • Co-located airport facilities for easier connections and check-in; and
  • The ability to select preferred seat assignments, process upgrades and redeem Award Tickets online.

The carriers will leverage the extended, long-term commercial agreement to exchange, within legal limits, best practices across operations, marketing and sales.

"The expanded relationship between Delta and Aeromexico comes at a key time in the history of Mexico's domestic aviation. Our company now boasts the most modern fleet and the largest network in the country, serving over 60 destinations," said Jose Luis Barraza, chairman of Aeromexico's board of directors. "The alliance with Delta that we've announced today will make history, and Grupo Aeromexico is proud to be a part of it."

Equity Investment

Under terms of the Memorandum of Understanding (MOU), Delta will invest $65 million in exchange for ordinary shares in Grupo Aeromexico, made up of treasury stock set aside as part of Aeromexico's primary public offering April, 14, 2011. Delta also will gain a seat on the Aeromexico board of directors. The transaction is subject to approval from certain Mexican regulators.

Maintenance, Repair and Overhaul Joint Venture

As part of a separate agreement, Delta and Aeromexico will expand their Maintenance, Repair and Overhaul (MRO) agreement with a new facility scheduled to open in the third quarter of 2013. The airlines will invest equal shares to establish a facility in Mexico that builds on existing repair work between the carriers, as well as third party airlines.

"The MRO agreement will represent significant savings for our maintenance group while continuing the extremely high quality work we receive from Aeromexico," said Delta President Ed Bastian. "The facility is a natural next step for the two airlines as we leverage the full benefits of our alliance."

About Grupo Aeromexico

Aeromexico, S.A.B. Ltd., is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. It has a fleet of Boeing 777, 767, 737 and the latest models of Embraer 145 and 190.

Grupo Aeromexico operates its main hub out of Terminal 2 in the Mexico City International Airport. The Group's airlines operate over 550 daily flights to different cities in Mexico, the United States, Canada, Central and South America, Europe and Asia.

Aeromexico is a founding member of SkyTeam, the global airline alliance comprised of the following 14 airlines: Aeroflot, Aeromexico, Air Europa, Air France, Alitalia, China Eastern, China Southern, CSA Czech Airlines, Delta Air Lines, KLM Royal Dutch Airlines, Kenya Airways, Korean Air, TAROM Romanian Air Transport, and Vietnam Airlines. SkyTeam offers all partner airline passengers a large global network with more destinations and frequencies, and improved connectivity. Passengers can accrue and redeem miles with the different partners' loyalty programs and enjoy the convenience provided at 465 airport lounges worldwide. SkyTeam offers its 474 million annual passengers more than 14,000 daily flights to 921 destinations in 168 countries. www.skyteam.com

About Delta Air Lines

Delta Air Lines serves more than 160 million customers each year, and was named by Fortune magazine as the most admired airline worldwide in its 2011 World's Most Admired Companies airline industry list. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 355 destinations in 65 countries on six continents. Headquartered in Atlanta, Delta employs 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, a world-class airline loyalty program; the award-winning BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta is investing more than $2 billion through 2013 in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. Customers can check in for flights, print boarding passes, check bags and review flight status at delta.com.

SOURCE Delta Air Lines

For further information: Delta Corporate Communications, +1-404-715-2554, News archive at news.delta.com; or Aeromexico Corporate Communications, (55) 5662-04-15


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