Delta and China Eastern Airlines have signed an agreement to expand their partnership and better connect Delta’s global network with China Eastern, one of the leading airlines in China. The agreement will include a $450 million investment by Delta to acquire a 3.55 percent stake in China Eastern.
The move marks a significant step in the airlines’ collaboration and a partnership that will allow Delta and China Eastern to compete more effectively on routes between the U.S. and China, provide more travel options for customers in both countries and make joint investments in the customer experience.
Delta News Hub (DNH) sat down with Vinay Dube, Senior Vice President – Asia-Pacific, to discuss the partnership.
DNH: Why is the partnership with China Eastern so important to Delta?
Dube: Delta has nearly tripled the size of its China network in the past five years. Pairing up with China Eastern increases our reach and further cements our commitment to the market and to our customers who travel between China and the U.S.
China Eastern is the hub carrier in the leading Chinese business market, Shanghai, so this is a great opportunity to build a profitable, enduring business model.
For the past three years, we’ve had the opportunity to host members of the China Eastern team at our headquarters for job shadowing and work study opportunities. So this move simply deepens our already effective partnership.
DNH: Will customers notice anything different as a result of this partnership?
Dube: Delta recently moved its operations at Shanghai’s Pudong Airport to Terminal 1, alongside China Eastern and Shanghai Airlines. Putting everyone in the same place gives customers the convenience of connecting in a single terminal.
Both carriers share a commitment to exceptional service and we’ll make more moves like this as our partnership develops. It will become seamless for customers to book travel that spans both carriers. That move alone will multiply the number of cities inside both countries that are now easily connected.
As the partnership matures, we will jointly invest in products and technology that will bring even more benefits to our customers
DNH: What is Delta’s investment in China Eastern worth?
Dube: Our $450 million investment in China Eastern is only a part of our partnership. While the investment results in a 3.55 percent stake in China Eastern and an observer seat on the China Eastern board of directors – the true value in this agreement comes from our shared vision to build a long-term, profitable partnership by creating a world-class, customer-focused offering, and be the most successful franchise in the growing the U.S. – China market.
DNH: Has Delta seen success in similar partnerships?
Dube: Absolutely – as I said at the start this has been a successful part of our strategy to connect our network to more points across the globe. I believe our success is a result of Delta’s results-driven culture, grounded on teamwork. Our long-running alliance with Air France–KLM has been quite successful in the trans-Atlantic and our newer alliance with Virgin Atlantic Airways continues to exceed all expectations. Looking at Latin America, we have thriving partnerships with GOL and AeroMexico. As we continue to grow our footprint in China, our partnership with China Eastern will be another win for our customers, employees and shareholders.
For more information, read the joint news release issued by China Eastern and Delta.