Delta Air Lines & Korean Air announce joint venture in shadow of China Southern's SkyTeam defection

Premium Analysis

It is surely no coincidence that Delta Air Lines and Korean Air announce their joint venture a mere two days after their SkyTeam partner China Southern Airlines - the largest in Asia, second largest in SkyTeam and sixth largest in the world - agrees to an investment and broad strategic partnership from Delta's rival, American Airlines, a member of oneworld.

Delta and Korean Air have long flagged their JV and the 29-Mar-2017 announcement is only a Memorandum of Understanding. The JV will have to be strong, with a high level of integration and trust, since it will involve profit sharing and not just revenue sharing.

Yet aside from that Delta and Korean have offered no new details, or even a time frame. Their announcement merely formalises what they have essentially been saying for months.

If it is to be leverage against China Southern-American, it should be noted that the two partnerships will be very different in the medium term and will not create significant competition with each other. The Delta-Korean JV comes with unfortunate timing for Korean Air, which continues to face slackening investor confidence and severe pressure in the Korea-China market.

Become a CAPA Member to access Analysis Reports

This CAPA Premium Analysis Report is 2,282 words.
Become a CAPA Member

Our Analysis Reports are only available to CAPA Members. CAPA Membership provides exclusive access to in-depth insights on the latest developments in the aviation and travel industry, developed by our team of dedicated analysts located in Europe, North America, Asia and Australia.

Each report offers a fresh perspective on the latest industry trends and is available online or via the CAPA mobile app, with customisable alerts to help you stay informed and identify new business opportunities.

CAPA Membership also provides access to our full suite of tools, including a tailored selection of more than 1,000 News Briefs every week and comprehensive data and analysis on thousands of companies around the world.