Korean Air in talks with Delta for joint venture, executive says

[SINGAPORE] Korean Air Lines Co is in talks with Delta Air Lines Inc for a joint venture, a move that would give the US carrier a bigger foothold in Asia.

Korean Air President Walter Cho told reporters at a briefing in Seoul's Incheon Airport Monday that details of the partnership would be provided later. He declined to elaborate.

A joint venture would deepen existing ties between the two airlines beyond code-sharing, helping Korean Air get greater access to destinations within the US and bring more traffic into Asia. For Atlanta-based Delta, the venture could help it gain a hub at Incheon Airport to compete more aggressively with other US airlines on their flights to Asia.

Delta and Korean Air in September agreed to expand their code-sharing partnership by increasing destinations that can be shared among their passengers, with a combined 142 locations in the Americas and 33 in Asia. Delta and Korean Air are two of the four founding members of the SkyTeam alliance, which began in 2000.

As part of its expansion in Asia, Delta bought a 3.6 per cent stake in state-owned China Eastern Airlines Corp in 2015 for US$450 million and later extended the cooperation to cover code-sharing, revenue management, scheduling, sales and frequent-flier programmes.

Incheon airport, which serves Seoul, is expected to start operating its second terminal as early as end-2017 to help increase its annual capacity to 62 million passengers from the current 44 million. The airfield has three runways. Korean Air is expected to operate from the new facility.

BLOOMBERG