Delta buying stake in Air France

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Delta buying stake in Air France

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Palm Beach Post Staff Writer
In this Oct. 13, 2016 file photo, a Delta Air Lines jet sits at a gate at Hartsfield-Jackson Atlanta International Airport in Atlanta. Delta Air Lines says it has canceled more than 3,000 flights this week as it continues to struggle in the aftermath of a storm that hit its hub airport in Atlanta.

Delta Air Lines is acquiring a 10 percent stake in Air France, part of a round of cross-border airline investments among the airline’s partners.

Atlanta-based Delta will buy the stake worth about $437 million in Air France-KLM, and will gain a seat on the board of Air France-KLM.

Air France will buy a 31 percent stake in Virgin Atlantic from Virgin Group.

Delta partner China Eastern is also acquiring a 10 percent stake in Air France-KLM.

Customers will be able to earn and redeem miles across all carriers and be able to make easier connections, according to Delta. Premium customers will get access to airline partner lounges.

“A dynamic global landscape means it’s more important than ever for Delta to deepen ties with our global partners to provide opportunities for mutual growth,” said Delta CEO Ed Bastian in a written statement.

The deals are subject to shareholder approval and regulatory approval.

The airlines said the deals are aimed at creating “a single global joint-venture” between Air France-KLM, Delta and Virgin Atlantic, and to strengthen the partnership with China Eastern.

Delta already has a trans-Atlantic joint venture with Air France-KLM and both are part of the SkyTeam airline alliance. Delta also already owns 49 percent of Virgin Atlantic and 3.5 percent of China Eastern.

Airlines are limited on cross-border acquisitions, but Delta and other carriers have been gaining some of the benefits of mergers through joint ventures with foreign carriers and equity stakes in partner carriers.

The airlines said the new deals between Delta, Air France, China Eastern and Virgin Atlantic will allow the airlines to grow.

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