Delta: Committed Long-Term to Shanghai Hub over Tokyo, Real Reason for Lack of Korean Partnership

In an interesting interview from earlier this month, Delta’s new CEO Ed Bastian notes that the airline is committed to Shanghai instead of Tokyo for a long-term Asian hub with partner China Eastern and that in the short-term some international flying may have to be cutback given weak foreign economies, security threats, and increasing fuel prices. Check out the full Bloomberg article here and video below.

Bastian said he’s committed in the long term to making Shanghai, instead of Tokyo, the center of Delta’s Asian operations. And partnerships or investments with China Eastern Airlines, Virgin Atlantic Airways, Aeromexico and Brazil’s Gol are expected to provide much of the airline’s growth. Delta also will look to expand in Canada and Central America, whether that means a partnership or some other arrangement, he said. “You know, the U.S. industry is largely a mature industry,” Bastian said. “There’s growth in this industry but there’s not new cities, there’s not new markets, there’s not new airports really being constructed. So if you’re going to look to grow in the future it has to be outside of the U.S.”

Shanghai might be a great Asian hub in the future after much investment, but Seoul is by far the better option right now. On that topic, later the same week Bastian sat for an interview and podcast with Airline Weekly where for the first time the airline finally seems to speculate on why the carrier does not have a more meaningful partnership with fellow SkyTeam member Korean and more importantly about what caused the tension. The CEO noted that at one point Korean was Delta’s main way to offer Asia to passengers.  However, after merging with Northwest, Delta became a rival. The relationship grew worse when Delta tried to buy Japan Airlines.  Bastian is hoping for more cooperation as the competitive landscape continues to evolve.

Update 5/14 – China Eastern to Expand Fleet to Over 800 Aircraft by 2020 as Delta Picks Shanghai over Tokyo

Delta China Eastern

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  1. PVG is a shithole of an airport that DL is going to have to spend hundreds of millions on to get up to any reasonable definition of a “hub.” China is a losing market right now anyway, and ICN would be the absolute best option, assuming DL could learn to play nice with its SkyTeam partners.

  2. So basically Korean didn’t want to submit to Delta and wanted a true partnership so Delta went around them and blamed them for being uncooperative.

  3. Korea has a much better service to Asia than Delta plus better award availability. Of course Delta does not want them as a partner.

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