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DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 10:27 am

Here's an article from the WSJ:

China Airlines Crash Leads to Delay in Delta Alliance

A valuable business linkup between China Airlines and Delta Air Lines that was to start this week will be delayed as safety concerns were reignited in the weekend crash involving the Asian carrier.

Taiwan's largest airline, China Airlines operated in near isolation the last three years as a result of a spate of deadly crashes. That was to end Saturday with a flight-link deal with Delta that has now been delayed indefinitely, executives at the companies said. The delay is one of several financial blows the carrier will suffer in the wake of Saturday's accident.

China Airlines was set to mark its return to international acceptance with the new Delta partnership, an important step for the carrier's prestige and its finances. Under the deal, Delta would have placed its passengers on China Airlines flights to Taipei from Los Angeles and San Francisco.

Airlines have hustled to find partners in recent years as a vital tool to grab more passengers, especially business travelers. But China Airlines has been left out since U.S. carriers AMR Corp.'s American Airlines and Continental Airlines dropped the Taiwan carrier in 1999 amid growing scrutiny of the safety record of U.S. airlines' foreign partners. Delta suspended its agreement to put passengers on Korean Air Lines after a Korean Air crash that year.

U.S. regulators have since required U.S. airlines to conduct safety audits of their prospective partners before finalizing so-called code-sharing deals for airlines to market seats on each others' flights. Washington signed off on Delta's audit of China Airlines last month, and the Taiwan carrier had told analysts it expected the arrangement to boost annual revenue by more than 1.4 billion New Taiwan dollars (US$40.8 million). China Airlines also was quietly preparing to join the global SkyTeam alliance led by Delta and Air France late this year.

The alliance also includes Korean Air, with which Delta reactivated code-sharing links this month while hailing its safety improvements. Ties with China Airlines, however, will be held up indefinitely, airline officials said. "I don't have any idea when [the codeshare] might be rescheduled," said Burt Pinoli, Delta's area general manager. "That's pending a lot of different things as you might imagine." Added Paul C.Y. Wang, a China Airlines spokesman, "There's a long way to go" before SkyTeam membership.,,SB1022507197367937160,00.html?mod=DAI

Seems like history repeats itself for DL as they simply cannot make any progress in Asia. My question is, where was DL when all the other carriers were pairing up a few years ago? I realize that DL's reputation in Asia has always been weak, but this is ridiculous. Do premiere Asian airlines like Singapore and Cathay think that poorly of DL?? Part of the problem is DL's weakness in many major business markets especially West Coast (LAX/SFO). Even still, it's kind of embarrassing when you're one of the largest airlines in the world and you can't find a few good partners.

KE is developing into a good partner, but all of KE's past problems have really hurt DL and kept SkyTeam light years behind the other alliances.
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 11:25 am

Q: Do premiere Asian airlines like Singapore and Cathay think that poorly of DL??

A: For the most part; Yes.
Basically anyone can see that Delta's transpacific operations would never have provided much feed to their airline. Even when DL served Hong Kong, etc. it was never with more than one flight per day, wheras United and NorthWest have several flights to many asian cities, and American at least has an honorable mention presence. AND Delta is very weak in the intra west coast markets. United has hubs or signifigant operations at SFO and LAX. And American Eagle has a hub at LAX as well as AA having signifigant operations around the west coast. Delta does not.
Delta does, however, have a good ammount of feed into and out of Europe, So they took off with some strategic partners in europe. Give the DL/KE partnership some time and I think you'll see Sky-Team catch up fairly quickly. Smile
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 11:27 am

Well, SQ was a DL partner for a number of years (remember the Global Excellence Alliance) but they ended up dumping them. Anyway, it does amaze me at times how DL allowed so many great partners to leave it. Looking into the not-so-distant past one can see that DL once codeshared with SQ, LH, SR (Yes, I know they're gone but I would argue that a major reason for their collapse lay in their knee-jerk reaction to DLs linkup with AF), OZ, VS, etc.

The CI link-up was, IMHO, a huge mistake from the get go. Was it not enough to have one Asian partner with a questionable safety record? At least KE have seemingly cleaned up their act and are taking safety much more seriously than before. However, the recent crash at CI (yes I know that the cause is still up in the air but this does not bode well for the airlines' already tarnished image) just reinforces the already poor safety image that they "enjoy." A much more prudent route to codesharing into Taiwan would have been to set up codeshares with SkyTeam partner KE. Failing that, DL could have set up shop with BR, an airline with an impeccable safety record.
Hughes Airwest - Top Banana In The West
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 11:31 am

Singapore and Malaysia airlines are still Sky-Miles partners; just no codeshare and no alliance.
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 11:45 am

I doubt that SIA and Malaysia will keep their Skymiles partnership for long though. SIA is in Star, and Malaysia is partnering up with NW, KLM, and CO in the new Wings Alliance.
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 1:10 pm

I highly doubt that SQ and Malaysia will end the sky miles deals...heck United is a direct competitor and we have sky miles deals with them. Also the Air Canada code sharing pact is due to go into affect soon! Any they are in Star anything about being in another alliance and not cooperating is BS.

Now points well taken that DL does not have a strong enough feed in the west coast market to complete attract SQ and Cathay but look at Northwest and United...they provide many flights from many home origins (i.e. US) to a few destinations across the pond....DL however provides the opposite.....few home destinations to many across the pond destinations. Different business strategy yet it seems to be paying off in the Atlantic...
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 1:32 pm

There are a few airlines in the region that might make acceptable (though not necessarily first-rate) Skyteam members, particularly the larger Chinese airlines like China Eastern or China Southern... What about PAL? Or maybe something will come of the oft-repeated rumor that Thai isn't satisfied in Star together with Singapore?
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 6:04 pm

Another option may be MH as there was a press report a month or so ago which said that MH had approached AF about potentially joining up with SkyTeam, unlikely as it may seem given MH's links with KL/NW. But MH would provide a good anchor for SkyTeam in SE Asia with inroads into Australasia...and MH is already a partner in DL and KE's FF programs
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 6:26 pm

Delta currently has a SkyMiles/code-share relationship with China Southern.

David / HNL
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 6:37 pm

All this criticism is pointless. It never fails to amaze me how people make such bold and pretentious comments about how poorly run and terribly uncompetitive Delta is, yet Delta's yields have consistently been in the top 3 of the majors and out of the Big 3, Delta currently enjoys the strongest financial position and, according to the experts on Wall Street, the brightest future.

But then again, I guess I shouldn't be surprised. Some people have been so busy calling Skyteam a joke that they haven't noticed that Skyteam is fast closing in on Star Alliance as the #1 transatlantic alliance. With oneworld unable to seal the deal with AA/BA ATI, they're going to have a hard time attracting new partners to their alliance.

Delta holds its own against everybody else. No, Delta does not serve 12 or 15 cities in Asia, but neither does American, and they survive somehow.

Okay, flame away....
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RE: DL And Its Asian Partners (or Lack Of)

Tue May 28, 2002 8:18 pm

First of all, I do think China Eastern Airlines will not become a partner with Delta, because MU (China Eastern Airlines) is much closer with One World Alliance.

By the way, a few weeks ago (probably a month), SkyTeam managing team went to Beijing and indicated that SkyTeam will be very very very pleased if they can find a chance to invite a carrier to be a member.

What I think is that China Southern Airlines maybe the only one out of China's three major airline groups finally join SkyTeam.

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