Delta Air Lines (DL, Atlanta Hartsfield Jackson) will not prioritise consolidation in the US aviation market, instead focusing on expanding abroad through partnerships, chief executive Ed Bastian told Bloomberg.
“If opportunities come your way, you’ll consider them, but we are not going to be proactive. Unless there is a significant business rationale that stands the test of time, it is really hard to think of taking on such a meaningful change in business strategy just because there is a window in Washington,” he said.
The current US administration has signalled that it is open to consolidation moves in the industry that in the past would not have been possible. So far, Allegiant Air (G4, Las Vegas Harry Reid) has acquired Sun Country Airlines (SY, Minneapolis St. Paul International), and other consolidation moves have been touted, such as United Airlines suggesting a merger with American Airlines.
Delta, meanwhile, is prioritising international expansion and adding routes, such as a new direct service to Riyadh, consolidating its partnership with IndiGo Airlines (6E, Delhi International), relaunching flights to Hong Kong International, and strengthening its presence in Latin America.
“That’s where we’re much more interested in investing,” Bastian said. “It’s not what part of a shrinking pie do you want to take, it’s how do you expand and how do you grow and how do you bring more relevance to your brand internationally.”
Separately, Berkshire Hathaway has bought a sizeable stake in Delta Air Lines, reportedly investing about USD2.6 billion, marking the conglomerate’s return to the airline industry since the COVID-19 pandemic, and also in Greg Abel’s first quarter at the helm since succeeding Warren Buffett.
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