Delta Buys Stake In Korean Air

By: Ben Schlappig

Updated: January 12, 2025
Published: June 20, 2019

22 comments

Delta acquires stake in Korean Air

It has just been announced that Delta has acquired a 4.3% equity stake in Hanjin-KAL, the largest shareholder of Korean Air. Delta plans to increase their equity stake in Korean Air to 10% over time, pending regulatory approval.

Delta and Korean Air have had a joint venture since May 2018. This joint venture gives passengers access to over 80 destinations in Asia, and over 290 destinations in the US. This investment is an expansion of that.

Delta CEO Ed Bastian had the following to say regarding this investment:

“Together with the team at Korean Air, we have a vision to deliver the world’s leading trans-Pacific joint venture for our shared customers, offering the strongest network, the best service and the finest experience connecting the U.S. with Asia. This is already one of our fastest-integrating and most successful partnerships, and experience tells us this investment will further strengthen our relationship as we continue to build on the value of the joint venture.”

Korean Air A380

What’s Delta’s motivation for investing in Korean Air?

American, Delta, and United, all have joint ventures. This essentially allows them to coordinate pricing and schedules with another airline, to create a strong presence in a market (it’s debatable whether passengers benefit from this or not).

What makes Delta different from the competition is the amount of control they like to have in these joint ventures. Delta is not only heavily focused on building joint ventures, but they also like to invest in airlines they partner closely with.

In many ways Delta is trying to build a global network through investments. Delta owns stakes (or is in the process of acquiring stakes) in Aeromexico, Air France-KLM, China Eastern, Gol, Korean Air, and Virgin Atlantic.

While an equity investment isn’t really needed to have a close partnership, I imagine it does give them more power in these relationships.

Delta A330

Bottom line

I have to give Delta credit for their consistent strategy with equity investments in global airlines. They have some of the strongest partnerships in the world, and I imagine that’s thanks to a combination of their joint ventures and their investments.

While Northwest was strong in Asia back in the day, Delta was definitely a weaker player there. The Korean Air joint venture has allowed them to once again become a stronger player in Asia.

However, it hasn’t been all good news for passengers — Delta is heavily focused on funneling everyone through Incheon, and we’ve seen some point-to-point routes canceled, like Seattle to Hong Kong.

I’ll be curious to see if this investment leads to an even higher level of cooperation in the short term.

What do you make of Delta’s investment in Korean Air?

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Shasha Guest

July 17, 2019, 2:19 pm

Yes, Alaska Airlines has previously lost KLM-Air France and Aeromexico as partners as a result of Delta's investment in these particular Airlines, and we know Delta competes fiercely with Alaska Airlines at their hubs in Sea-Tac International Airport in the Seattle area and really has it in for the little guy. At the end of the day, Alaska Airlines has better Asian airlines to work with such as Japan Airlines, Singapore Airlines, Hainan Airlines, and Emirates. all of these airlines either are or have been considered top-of-the-line five star Airlines as rated by skytrax. Korean Air is only four stars. The SkyTeam Alliance which includes delta and korean is the worst of the three alliances for the Asia Market, and now that they are losing China Southern from that Alliance, it might just get worse. So, I say, whatever if korean servers ties with alaska. Goodbye, good riddance to delta and its b*tches. Maybe Alaska can partner with five-star Eva if they lose Korean. I'm glad that Alaska Airlines has proactively sought to build good relationships with strong Airlines in Asia as a result of its rivalry with Delta, knowing that Delta would use all its might and influence to undermine Alaska Airlines' business relationships. In many ways, this rivalry is beneficial for Alaska. The Alaska Airlines mileage program is much better as a result, and I'm glad that I am a member of it.

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Simon Diamond

June 21, 2019, 1:00 pm

Not anything that isn't already implied, a la protecting recently agreed partnership & APAC hub, but - https://www.reuters.com/article/us-delta-stake-idUSKCN1TL1EO Outlines the event, reasons, impact fairly well using both investment terminology but easily understandable.

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Richard Toscano Guest

June 20, 2019, 11:21 pm

"I’ll be curious to see if this investment leads to an even higher level of cooperation in the short term." I assume you mean "in the long term"?

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David-in-Florida Guest

June 20, 2019, 11:09 pm

We will miss the flights on Delta metal all the way to SIN. Korean Air service is fine but their integration with the Delta IT systems is incomplete. Also, we have had long layovers in Seoul. We much prefer flying Delta from USA to NRT then onto SIN on Delta metal also. I understand that is expected not to be an option soon.

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Dan Guest

June 20, 2019, 8:53 pm

I do wonder if Virgin Australia is next on DL's investment (taking either the HNA or EY stake) considering VS and VA about to apply for JV, undoubtedly under the instruction of DL (as VS's half-owner and 'ruler')

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