Loading

Delta Air Lines balances long term foreign investments (and JVs) with short term shareholder rewards

One of the largest agenda items for Delta Air Lines in 2016 is gaining approval for a joint venture with Aeromexico and moving forward to enlarge its stake in Mexico’s largest airline to force change that should drive financial benefits for both airlines. Delta plans to use its three year old investment in Virgin Atlantic as a blueprint for guiding Aeromexico to increased efficiency and margins.

Delta is also taking a stake in China Eastern, and once that agreement is formalised Delta says it will have a foothold in all the top international regions from the US. Many of Delta’s moves to invest in foreign airlines during the last few years reflect its strategy of building network utility for the long haul, creating a scenario where it has to balance those investments with creating an appropriate level of return for shareholders.

In the short term, Delta continues to stress measured capacity growth of flat to 2% in 2016, with the bulk of the increase allocated to the domestic market. Most of the domestic capacity is targeted to New York, Seattle, Los Angeles and Seattle, regions that Delta believes warrant the added supply.

Become a CAPA Member to access Analysis Reports

This CAPA Premium Analysis Report is 1,588 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 400 News Briefs every weekday and comprehensive data and analysis on thousands of companies around the world.