Delta Air Lines looks to strengthen global partnerships

By Reuters

Jun 09, 2015 11:06 AM EDT

Delta Air Lines Inc (DAL.N) is hoping to strengthen partnerships with carriers in South Korea, Mexico and Brazil, and it has been approached about investing in Japan's bankrupt Skymark Airlines, Delta's president Ed Bastian told reporters Monday.

The comments, made on the sidelines of the International Air Transport Association's (IATA) annual meeting, reflect Delta's focus on streamlining flight service through cross-country partnerships and ventures.

Bastian declined to comment on the status of the Skymark investment talks and what their outcome might be. Aircraft leasing firm Intrepid Aviation Ltd (INTR.N), the biggest creditor of Skymark Airlines, is seeking another sponsor for the failed budget carrier instead of ANA Holdings Inc (9202.T), a Japanese rival airline bidding to take part in the restructuring.

Skymark holds landing slots at Tokyo's Haneda Airport that U.S. airlines consider valuable, as a treaty limits U.S. carriers to four slots there. A Skymark investment could pave the way for greater Delta service to Asia, where U.S. airlines are competing vigorously to grow.

Delta is also interested in growing its relationship with long-time partner Korean Air Lines Co Ltd (003490.KS) after their ties were weakened by Delta's acquisition of Northwest Airlines, which already had extensive Asian routes and competed with KAL, Bastian said.

"We've been working hard with our Korean colleagues to reestablish a solid base for the relationship," he said. "I'm optimistic we'll find an answer" on how to proceed.

Delta is eyeing growth through partnerships across the Pacific, too.

The airline recently petitioned the U.S. government for antitrust immunity in a joint venture with Grupo Aeromexico SAB de CV (AEROMEX.MX) and Bastian said Delta already has about a 17-percent stake in the carrier.

"We're working on" replicating alliances like the one Delta has with Virgin Atlantic Airways Ltd [VA.UL], where Delta's stake is 49 percent, Bastian said.

Antitrust immunity would help the two airlines coordinate schedules and prices for U.S.-Mexico flights.

Delta said it sees the potential for an antitrust immunized joint venture with Gol Linhas Aereas Inteligentes SA (GOL.N) as well, although that is "a little further behind" because the Brazilian airline does not operate as many international routes.

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