China Eastern, Air France KLM, Delta, & Virgin Atlantic have reached a mega deal. The China Eastern, Air France KLM, Delta, & Virgin Atlantic deal involves the transfer of ownership. China Eastern Airlines, as well as Delta Airlines, will purchase 10% of the shares of Air France-KLM.
Details of China Eastern, Air France KLM, Delta, & Virgin Atlantic Deal
It is a deal involving multiple airlines. Let us have a breakdown to understand the details.
As mentioned before, Delta Airlines and China Eastern Airlines will purchase new shares of Air France-KLM. Both the companies will invest around $875 million.
Further details of the China Eastern, Air France KLM, Delta, & Virgin Atlantic deal include Air France-KLM buying around 31% stakes in Virgin Atlantic Airways. The French airlines will shell out around $287 million. Richard Branson, Virgin Atlantic Airways’ founder, announced that he would remain the biggest individual investor.
Delta Airlines on China Eastern, Air France KLM, Delta, & Virgin Atlantic Deal
The CEO of Delta Airlines has said that the company wants to improve its relationships with its global partners further. Therefore, he believes that the new deal will help provide mutually rewarding growth opportunities. The China Eastern, Air France KLM, Delta, & Virgin Atlantic deal will bring together strengths of all the airlines.
Similarly, he also praised the approach by Delta Airlines to understand the changing dynamics of the aviation industry. He also said that the new deal would help companies expand their strategic investments.
The Massive Impact of the Deal on All Airlines
The new deal is believed to be among the biggest. It will give access to some of the most sort after transatlantic destinations like Paris, Amsterdam, Atlanta, London, and New York.
China Eastern Airlines Access to the US Market
The China Eastern Airlines will be able to operate 35 weekly departures to 4 different destinations in the US directly from Shanghai. It will fly two flights each day to Los Angeles. The deal includes one trip daily to New York, Hawaii, and San Francisco. Similarly, three flights will operate from Nanjing to Los Angeles. The company also plans to run more routes for the North American market.
Delta Going Big in China
Delta Airlines also plans to operate around 28 weekly flights to Shanghai. The company currently offers daily flights to Beijing from Detroit and Seattle. Furthermore, it flies one flight from Seattle to Hong Kong. The company’s destination network has grown three times only in the last five years. The company has a significant market presence in the US, as it wants to expand and cater to the Chinese airline industry.
Air France-KLM Going Strong
The airline has already announced its strong business growth. Air France-KLM revealed higher growth in the second quarter profits. It has seen an increase in sales by 6.6% to EUR 6 billion compared to last year. The company also said that it had earned gross profit margins of EUR 367 million, seeing a growth of EUR 43 million. The new deal will give the company access to the lucrative London destination. It serves as one of the most famous destinations for flights between the US and Europe.