Korean Air, Delta unveil transpacific joint-venture plans

Korean Air (KE, Seoul Incheon) and Delta Air Lines (DL, Atlanta Hartsfield Jackson) are set to deepen their existing commercial ties following the signing last week of an agreement to establish a trans-Pacific joint venture.

In a statement, the two airlines said this agreement is the finalization of a Memorandum of Understanding (MOU) signed in March announcing the intention to form a joint venture.

Subject to regulatory approvals, Delta and Korean Air aim to create a combined network serving more than 290 destinations in the Americas and more than eighty in Asia.

"The joint venture will augment the two airlines' capabilities in the trans-Pacific market and provide the necessary scale and scope to compete in this market," they said.

The joint-venture will see the two expanding their codesharing in the trans-Pacific market while implementing joint sales and marketing initiatives in Asia and the United States. Delta already codeshares on multiple Korean Air-operated flights across South Korea, as well as to Japan, the United States, Vietnam, Indonesia, Sri Lanka, Thailand, Hong Kong, Malaysia, India, Cambodia, and Singapore. Korean Air, in turn, codeshares on Delta-operated flights across the United States.

Customers will also see tangible benefits through the two carriers' proposed colocation at key hubs thereby offering a seamless passenger and baggage transit experience. They will also be able to earn and redeem miles on Delta's SkyMiles and Korean Air's SKYPASS programs. There will also be increased belly cargo cooperation across the trans-Pacific.

Operationally, the airlines will also share costs and revenue on flights within the scope of the joint venture.

"Now is the right time for this JV. The synergies we're creating will build stronger and more sustainable companies, and this is good for travelers, our companies, and our countries," said Korean Air Chairman, Y.H. Cho.

As previously reported, JetBlue Airways (B6, New York JFK) and Hawaiian Airlines (HA, Honolulu) have already called on the US Department of Transportation (DOT) to rescrutinize the partnership for antitrust immunity. Though Delta's and Korean Air's existing partnership was immunized in 2002, jetBlue and Hawaiian argue that the playing field has changed dramatically over the past fifteen years thus warranting the regulator's scrutiny.