Delta sees room for more cooperation with equity partners

ATLANTA Delta Air Lines Inc (DAL.N) sees opportunities for the airlines in which it owns equity stakes to cooperate more in the next five years, Delta’s incoming Chief Executive Ed Bastian told reporters in Atlanta on Friday.Airlines have increasingly turned to buying stakes in carriers from other countries in order to acquire board seats and somewhat re-shape those airlines in their image. That way travelers experience similar cabin layouts and amenities on the partner airlines no matter which one they fly.When allowed by certain international aviation accords, the owning airline such as Delta also can coordinate its partners’ prices, capacity and flight times to minimize the length of layovers.Delta owns stakes in Virgin Atlantic Airways Ltd [VA.UL], China Eastern Airlines Corp Ltd (600115.SS), Grupo Aeromexico SAB de CV (AEROMEX.MX) and Brazil’s Gol Linhas Aereas Inteligentes SA (GOLL4.SA).

Bastian said Delta remains committed to SkyTeam, a global airline marketing alliance, but there separately would be a chance for these specific airlines to cooperate more.Abu Dhabi’s Etihad Airways, in addition to Delta, has spearheaded the equity alliance model.

Delta’s incoming President Glen Hauenstein later told reporters sitting on one of the airline’s widebody aircraft in Atlanta that Delta was thinking a lot about a new competitive challenge: low-cost airlines that fly across the Atlantic.Atlanta-based Delta said on an analyst call earlier this month that trans-Atlantic flights by the likes of low-cost airline Norwegian Air Shuttle ASA (NWC.OL) exceeded customer demand and threatened to lower fares to Europe.

Hauenstein said on Friday that Delta would evolve its product in time if necessary to fend off the new competition, although he did not specify how. (Reporting By Jeffrey Dastin in Atlanta; Editing by Chizu Nomiyama)


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