Korean Air sign joint venture pact with Delta Air Lines

Korean Air recently signed a joint venture agreement with Delta Air Lines. Both the airlines are presently members of leading global airline alliance SkyTeam. Delta Air Lines has for long been eyeing to gain a firm foothold in Asia and expand its services in different countries of this continent. This though depends on the regulatory approval, which Delta is strongly hoping for.

Media reports said that both Delta Air Lines and Korean Air had an uneasy relation for several years. Delta Air Lines was always looking for a joint venture agreement with Korean Air for serving the Asian market better. While, Korean Air on the other hand, didn’t favor of closer cooperation with Delta. Both the airlines even took a series of retaliatory action against each other. However, over the years the situation gradually changed, and the two airlines finally decided to enter into joint venture pact.

Travel experts said that a number of U.S. legacy carriers devised meaningful strategies for international growth by signing joint venture agreements ever since the Great Depression. This key aspect allowed the airlines and their partners to effectively coordinate in matters of pricing and flight schedules. This was also another way to keep competitiveness within manageable limits and allow the airlines to offer more flexibility to their customers through increased connecting itinerary options.

It may be noted that U.S. legacy carriers such as United Continental, American Airlines and Delta Air Lines have joint venture agreements with major European airlines. These joint ventures have enabled the effective control of more than 80 percent of capacity in the transatlantic market.

Apart from these, United Continental and American Airlines have major foothold in Asia by virtue of joint venture agreements with Japan’s leading carriers – Japan Airlines and All Nippon Airways (ANA). This has though left Delta Air Lines behind in the race to some extent. The adverse circumstances have denied Delta its share in Asian market leading to a cut in services in Japan.