SHANGHAI and ATLANTA, July 27,
2015 /PRNewswire/ -- China Eastern Airlines and Delta Air
Lines today signed an agreement to expand their partnership and
better connect Delta's global network with China Eastern, one of
the leading airlines in China. The
agreement will include a $450 million
investment by Delta to acquire a 3.55 percent stake in China Eastern.
This move marks a significant step in the airlines'
collaboration and partnership that will allow Delta and China Eastern to compete more
effectively on routes between the U.S. and China, provide more
travel options for customers in both countries and make joint
investments in the customer experience.
"The execution of the Subscription Agreement and the launching
of commercial cooperation plan by China Eastern and Delta indicate
significant strategic moves of China Eastern to comprehensively
reform further, actively explore and develop mixed ownership
economy, and actively promote globalized development," said
Shaoyong Liu, China Eastern CEO.
"The cooperation of the parties is based on a global vision and
joint strategic blueprint. The parties will take advantage of their
respective route networks, flight services, relevant businesses and
advantageous resources to fully connect the world's two top
economies as well as two top air transportation markets. The
parties wish, through excellent operation and international
cooperation, to optimize customer experience, enhance the parties'
global competitiveness and promotes the development and revenue
growth of both parties."
"Delta's relationship with China Eastern is long-standing. We
share a vision that will create the most profitable, enduring
franchise between the U.S. and China, with world-class customer
service," said Richard Anderson,
Delta CEO. "For the past three years, Delta has welcomed members of
the China Eastern team at our headquarters for sharing best
practices and work study opportunities. We have learned much from
one another already and look forward to deepening our already
effective partnership."
China Eastern, with its wholly owned subsidiary Shanghai
Airlines, and Delta currently operate codeshare flights on 30
domestic routes in the U.S., 43 domestic routes in China and seven trans-Pacific routes between
China and the U.S. China Eastern serves the three largest
U.S. markets, with four nonstop flights from Shanghai and Delta serves the three largest
cities in China with six daily
non-stop flights from the U.S.
China Eastern and Delta continue to strengthen cooperation and
support each other in the China-U.S. market through greater access
to each other's networks and an improved customer experience. Among
recent improvements:
- China Eastern and Delta have expanded their joint China-U.S.
offering – further cementing their position in the largest market
to/from Shanghai – with Delta's
recent addition of new Los Angeles
to Shanghai service.
- Delta's recent move to Terminal 1 at Shanghai's Pudong Airport to co-locate with
China Eastern and Shanghai Airlines has resulted in more convenient
connections and a seamless airport and baggage experience for
customers.
- Newly developed joint corporate sales provide more competitive
products to customers in China and
the U.S.
Equity investment
As part of the enhanced strategic
partnership, China Eastern and Delta entered into a conditional
subscription agreement where Delta will invest $450 million in China Eastern's H-shares, which trade on the
Hong Kong Stock Exchange. The investment equals approximately 10
percent of China Eastern H shares and [3.55] percent of the total
shares of China Eastern. Delta also will be entitled to an observer
seat on the China Eastern board of directors. The agreement is
conditioned upon achievement of a final marketing agreement and
approval by each carrier's board of directors.
"The cooperation between China Eastern and Delta is a strategic
cooperation between two excellent airlines which connect the
world's two top economies as well as two top air transportation
markets. We're fully confident in the prospect of the
cooperation," said Shaoyong Liu, the
Chairman of China Eastern.
"Delta's equity investment in China Eastern is an investment in the future
success of the partnership," Anderson said. China is the second
largest travel market from the US and is projected to grow more
than twice the global average, becoming the largest market from the
U.S. in the next few years.
China Eastern in the U.S.
China Eastern will operate
35 weekly departures to 4 destinations in US from Shanghai, 2 flights a day to Los Angeles, daily to New York, San
Francisco and Hawaii, also
3 flights a week from NanJing to
Los Angeles. China Eastern
operates Luxurious new 777-300ERs on routes between China and
North America, which will be a
major market for China Eastern over the future years. China Eastern
plans to open new routes to North
America and also boost frequencies on existing routes.
Delta in China
Delta
will operate 28 weekly departures to Shanghai this
summer. Delta also offers daily service
to China's capital, Beijing, from Seattle and Detroit and to Hong Kong from Seattle. Delta has grown its China network by
nearly three times in the past five years.
The partnership with China Eastern is part of Delta's broader
strategy to collaborate and expand services to China and
offer the most robust global airline network to become a more
prominent U.S. carrier while continuing to offer the most robust
network choices of a U.S. global carrier.
Delta is making significant investments to build the most
Chinese-friendly U.S. airline. Chinese travelers are well served
with local language options on delta.com, at airport
self-service kiosks and among in-flight entertainment selections.
The airline has Chinese-speaking flight attendants on every flight
to and from China and offers Chinese cuisine among its
in-flight meal options. Delta launched its official WeChat account
to provide Chinese customers with in-language flight information,
marketing promotions and tips for popular Delta destinations
through China's most popular SNS service.
About China Eastern
Headquartered in Shanghai, CEA is one of the leading airlines
in China. It has been listed in
Shanghai, Hong Kong and New
York since 1997, which is the first airline in the civil
aviation industry in China that
achieved listing in three markets. Adhering to the philosophy of
"Customer-Oriented and Dedicated Service," CEA has been providing
safe and comfortable air journeys to passengers for many years and
in many occasions been named "The Most Popular Airline" by
internationally-recognized institutions. The fleet of the Company
comprised a total of 550 modern aircraft and freighters. Leveraging
upon Shanghai core hub and
Xi'an and Kunming regional hubs,
it has established and extended its aviation transportation network
to cover 1,052 destinations in 177 countries. With an extensive
global outreach, the Company provides quality services to more than
90 million travelers all over the world every year. The Company
joined SkyTeam Alliance in 2011. Its Eastern Miles frequent flyer
program now has 22.84 million members who can enjoy member benefits
offered by 20 airlines of SkyTeam Alliance and lounge access to 516
lounges worldwide. With the concept of "World-class hospitality
with Eastern charm," China Eastern creates splendid travel
experiences for global customers with an "accurate, delicate and
precise" service quality. The Company strives to become an
integrated aviation services and logistics services provider that
is "cherished by staff, preferred by customers, satisfied by
shareholders and trusted by society."
Website:www.ceair.com; Customer service line:+86 (95530).
About Delta
Delta Air Lines serves more than 170
million customers each year. Delta was named to FORTUNE magazine's
top 50 World's Most Admired Companies in addition to being named
the most admired airline for the fourth time in five years.
Additionally, Delta has ranked No.1 in the Business Travel News
Annual Airline survey for four consecutive years, a first for any
airline. With an industry-leading global network, Delta and the
Delta Connection carriers offer service to 334 destinations in 64
countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees
worldwide and operates a mainline fleet of more than 700 aircraft.
The airline is a founding member of the SkyTeam global alliance and
participates in the industry's leading trans-Atlantic joint venture
with Air France-KLM and Alitalia as well as a joint venture with
Virgin Atlantic. Including its worldwide alliance partners, Delta
offers customers more than 15,000 daily flights, with key hubs and
markets including Amsterdam, Atlanta, Boston, Detroit, Los Angeles,
Minneapolis/St. Paul, New York-JFK, New York-LaGuardia,
Paris-Charles de Gaulle, Salt Lake City, Seattle and Tokyo-Narita.
Delta has invested billions of dollars in airport facilities,
global products and services, and technology to enhance the
customer experience in the air and on the ground. Additional
information is available on the Delta News Hub, as well as
delta.com, Twitter @DeltaNewsHub, Google.com/+Delta,
Facebook.com/delta and Delta's blog takingoff.delta.com.
Forward Looking Statements
Statements in this press
release that are not historical facts, including statements
regarding our estimates, expectations, beliefs, intentions,
projections or strategies for the future, may be "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995. All forward-looking statements involve a number of
risks and uncertainties that could cause actual results to differ
materially from the estimates, expectations, beliefs, intentions,
projections and strategies reflected in or suggested by the
forward-looking statements. These risks and uncertainties
include, but are not limited to, the cost of aircraft fuel; the
availability of aircraft fuel; the impact of rebalancing our hedge
portfolio, recording mark-to-market adjustments or posting
collateral in connection with our fuel hedge contracts; the
possible effects of accidents involving our aircraft; the
restrictions that financial covenants in our financing agreements
will have on our financial and business operations; labor issues;
interruptions or disruptions in service at one of our hub or
gateway airports; disruptions or security breaches of our
information technology infrastructure; our dependence on technology
in our operations; the effects of weather, natural disasters and
seasonality on our business; the effects of an extended disruption
in services provided by third party regional carriers; failure or
inability of insurance to cover a significant liability at
Monroe's Trainer refinery; the
impact of environmental regulation on the Trainer refinery,
including costs related to renewable fuel standard regulations; our
ability to retain management and key employees; competitive
conditions in the airline industry; the effects of extensive
government regulation on our business; the sensitivity of the
airline industry to prolonged periods of stagnant or weak economic
conditions; the effects of terrorist attacks or geopolitical
conflict; and the effects of the rapid spread of contagious
illnesses.
Additional information concerning risks and uncertainties that
could cause differences between actual results and forward-looking
statements is contained in our Securities and Exchange Commission
filings, including our Annual Report on Form 10-K for the fiscal
year ended Dec. 31, 2014.
Caution should be taken not to place undue reliance on our
forward-looking statements, which represent our views only as of
July 27, 2015, and which we have no
current intention to update.
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SOURCE Delta Air Lines