Delta Air Lines Makes $450 Million Investment In China Eastern
China Eastern Airlines and Delta Air Lines today signed
an agreement to expand their partnership and better connect DL’s global network
with MU. The centrepiece of the agreement is a $450 million investment by DL,
giving it a 3.55% stake in the Chinese carrier.
"Delta's relationship with China Eastern is
long-standing. We share a vision that will create the most profitable, enduring
franchise between the U.S. and China, with world-class customer service,"
said Richard Anderson, Delta CEO. "For the past 3 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."
Shaoyong Liu, China Eastern CEO, also sees strong
benefits from the enhanced relationship. "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 2 top
economies as well as 2 top air transportation markets.”
MU, along with its wholly owned subsidiary Shanghai
Airlines, and Delta currently operate codeshare flights on 30 domestic routes
in the U.S., 43 domestic routes in China and 7 trans-Pacific routes between
China and the U.S.
MU serves the 3 largest U.S. markets, with 4 nonstop
flights from Shanghai and DL serves the 3 largest cities in China with 6 daily
non-stop flights from the U.S.
As part of the enhanced strategic partnership, China
Eastern and Delta entered into a conditional subscription agreement where Delta
will invest $450 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 MU.
DL will also be entitled to an observer seat on the China
Eastern board of directors. The agreement is conditional upon achievement of a
final marketing agreement and approval by each carrier's board of directors.
DL says it is making significant investments to build the
most Chinese-friendly U.S. airline. The airline has Chinese-speaking flight
attendants on every flight to and from China and offers Chinese
cuisine among its in-flight meal options.
The airline launched its official WeChat account to provide
Chinese customers with in-language flight information, marketing promotions and
tips for popular DL destinations through China’s most popular SNS service.