Delta Air Lines is stuck in the middle of a scrap between China and Taiwan, just as the carrier expands in the lucrative region.
China has demanded that airlines stop referring to Taiwan as a country on their websites, and pinpointed Atlanta-based Delta as one of four airlines that was "incomplete" in making changes by China's deadline this week.
The war over words highlights the challenges U.S. companies with a global presence face in navigating politics overseas. What otherwise might be a minor dispute over semantics takes on significant weight for businesses that want to avoid making enemies in fertile international markets.
This week's development also reflects an "increasing willingness by countries to use economic punishment to get their way politically," said Penelope Prime, a professor at Georgia State University and founding director of the China Research Center.
Delta, as a company that operates internationally, is “affected by these types of geopolitical perspectives. It certainly adds risks to their international operations,” Prime said.
It’s yet to be seen what the potential consequences could be if China ultimately disagrees with how U.S. airlines list Taiwan on their websites.
Prime said there’s a chance if airlines don’t do “exactly what China wants, that they will say you can’t fly into China anymore. That would be extreme, but it’s certainly possible.”
If that happened, it would cut off one of the most crucial markets for Delta’s future growth.
In January, China flexed it’s political muscle and ordered Marriott to shut down its mainland China website and app for a week after the hotel chain sent a customer survey including Taiwan, Tibet and Hong Kong in a list of countries.
This week, the Civil Aviation Administration of China said 40 of 44 foreign airlines had “rectified” the matter, and called out United, American, Delta and Hawaiian airlines for “incomplete” progress.
Delta officials say the airline and other U.S. carriers are “in the process of implementing website changes in response to the Civil Aviation Administration of China’s request, and we will remain in close consultation with the U.S. Government throughout this process.”
‘Trying to finesse it’
The conflict comes as Delta restarts its Atlanta-Shanghai route, increasing its presence in China.
China, one of the largest economies in the world, is a key market for Delta’s future growth. Delta discontinued service to Taiwan last year, but flies to Beijing, Shanghai and Hong Kong from U.S. hubs.
By the Wednesday deadline, Delta had changed the way it listed Taipei, Hong Kong and Macau, as well as Beijing, Shanghai and other cities in China — using only the city name and no country in its website booking engine.
“Clearly they’re trying to finesse it,” said Charles Shapiro, president of the World Affairs Council of Atlanta.
A Delta web page on destinations in the Asia Pacific region takes a similar tack, listing cities and countries like “Bangkok, Thailand” and “Osaka, Japan,” but only city names “Beijing” “Hong Kong” and “Shanghai.”
Yet even after the deadline, Delta’s downloadable Asia route map and interactive route map identified countries including “China” — with “Taiwan” also identified. Another Delta web page lists Asia “Countries/Regions” as “China; Japan; Guam; Hong Kong; Palau; Saipan; Singapore; South Korea; Taiwan; Thailand.”
President Donald Trump has indicated a more open attitude toward Taiwan than past U.S. presidents since shortly after he won the election, when he accepted a congratulatory call from Taiwan’s president.
It was the first such communication between the two countries’ leaders since 1979, when the United States established diplomatic ties with China and cut official ties with Taiwan, which China considers to be a breakaway province.
The issue over how Taiwan is portrayed on airline websites has been brewing since earlier this year. In January, the Civil Aviation Administration of China called for a correction and public apology from Delta for listing Taiwan and Tibet as countries on its website.
The airline issued a statement saying: "Delta recognizes the seriousness of this issue and we took immediate steps to resolve it. It was an inadvertent error with no business or political intention, and we apologize deeply for the mistake."
For Delta, Shapiro said, “It’s a business decision.”
Delta faced backlash from Taiwan. Vincent Liu, director general of the Taipei Economic and Cultural Office in Atlanta, said he also discussed his concerns with Delta and believes information provided to passengers should be “accurate” and “non-biased.”
“We are a democratic country. I just don’t know how anyone can apologize,” Liu said. “We are not in any position to teach any company what to do, how to run their business. But we do have a position to tell everybody who we are and how we are named. And we don’t need anybody to teach us how to name ourselves.”
From Delta’s point of view, Prime said, “China is a big elephant in the room, and Taiwan is an important piece of the economy, but really has very little voice in the international arena.”
China recently “has become more active, more assertive internationally on the political scene,” she said. “So this is just a very small example.”
In May, White House press secretary Sarah Huckabee Sanders issued a statement criticizing China on the issue, saying: “This is Orwellian nonsense and part of a growing trend by the Chinese Communist party to impose its political views on American citizens and private companies,” the New York Times reported.
But history shows the significance of the dispute, Prime said. It may seem like a small issue, “but if you look at the whole development of the region, it’s fairly important,” she said.
“Companies like Delta know that,” Prime said. “I’m sure they want the whole thing to go away.”
Delta, the U.S. and Taiwan
December 2016: Then President-elect Donald Trump took a protocol-breaking congratulatory call from Taiwan's president, the first such communication between leaders of the U.S. and Taiwan since 1979. China lodges a complaint over the call.
January 2018: Delta apologizes to China for listing Taiwan and Tibet as countries, after facing criticism from the Civil Aviation Administration of China.
This week: The Civil Aviation Administration of China called out Delta, American, United and Hawaiian airlines for "incomplete" rectification of the matter.
Source: AJC archives, research
