Korean Air Part 2: Delta Air Lines difficult but potential JV partner. Pause on US-LatAm growth
This is the second part about Korean Air's North American market, its largest long-haul segment. Korean Air expanded across the trans-Pacific over the past decade and has become relatively mature. Now as competitors grow and face some time to settle in to their markets, Korean Air is aiming to boost profitability, which competitors will turn to later. Korean Air has been seeing yield growth, and VP Americas John Jackson said at CAPA's Americas Aviation Summit: "We're not the low fare carrier" across the Pacific.
New premium products were probably over-due, and Korean Air's first direct aisle access business class seats should be welcomed by the market. US-Latin America fifth freedom opportunities - particularly a Los Angeles-Lima flight - will not be launched as Korean Air is in this conservative period. Its existing Los Angeles-Sao Paulo service is facing competition from American Airlines. The market may be too small for both. This is greatly over-shadowed by the opportunity from a potential joint-venture with quasi-partner, quasi-foe Delta Air Lines. Mr Jackson sees the Delta relationship improving with the potential to tie the knot: "There's too much at stake and to be realised." Korean Air's size gives it leverage, and Mr Jackson says "We don't have to take the first offer."
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