China Eastern and Delta solidify strategic partnership, Delta acquires 3.55% stake in China Eastern

China Eastern Airlines and Delta Air Lines signed (27-Jul-2015) an agreement to expand their partnership and better connect Delta's global network with China Eastern Airlines. The agreement will include a USD450 million investment by Delta to acquire a 3.55% stake in China Eastern. Details include:

• Subscription agreement: As part of the enhanced strategic partnership, China Eastern and Delta entered into a conditional subscription agreement where Delta will invest USD450 million in China Eastern's H-shares, which trade on the Hong Kong Stock Exchange. The investment equals approximately 10%of China Eastern H shares and 3.55% of the total shares of China Eastern. Delta also will be entitled to an observer seat on the China Eastern board of directors. The agreement is conditioned upon achievement of a final marketing agreement and approval by each carrier's board of directors;
• Current codeshares: China Eastern, with its wholly owned subsidiary Shanghai Airlines, and Delta currently operate codeshare services on 30 domestic routes in the US, 43 domestic routes in China and seven trans-Pacific routes between China and the US;
• China Eastern in the US: China Eastern will operate 35 weekly departures to four destinations in US from Shanghai, twice daily to Los Angeles, daily to New York, San Francisco and Hawaii, and three times weekly from NanJing to Los Angeles. China Eastern operates new Boeing 777-300ERs on routes between China and North America, which will be a major market for China Eastern over the future years. China Eastern plans to open new routes to North America and also boost frequencies on existing routes;
• Delta in China: Delta will operate 28 weekly departures to Shanghai this summer. Delta also offers daily service to China's capital, Beijing, from Seattle and Detroit and to Hong Kong from Seattle. Delta has grown its China network by nearly three times in the past five years;
• Delta strategy: The partnership with China Eastern is part of Delta's broader strategy to collaborate and expand services to China and offer the most robust global airline network to become a more prominent US carrier.

China Eastern Airlines CEO Shaoyong Liu commented on the agreement: "The execution of the Subscription Agreement and the launching of commercial cooperation plan by China Eastern and Delta indicate significant strategic moves of China Eastern to comprehensively reform further, actively explore and develop mixed ownership economy, and actively promote globalized development... The cooperation of the parties is based on a global vision and joint strategic blueprint. The parties will take advantage of their respective route networks, flight services, relevant businesses and advantageous resources to fully connect the world's two top economies as well as two top air transportation markets". Delta Air Lines CEO Richard Anderson said: "For the past three years, Delta has welcomed members of the China Eastern team at our headquarters for sharing best practices and work study opportunities. We have learned much from one another already and look forward to deepening our already effective partnership." [more - original PR - I] [more - original PR - II] [more - original PR - China Eastern Airlines stock statement]