Delta Air Lines said on Thursday it has acquired 4.3% stake in Korean Air Lines Co Ltd’s parent company Hanjin Kal Corp.
Atlanta-based Delta is growing internationally both through joint ventures - which allow airlines to coordinate fares and schedules while building a presence in new markets - and equity investments, which help airlines align their respective strategies.
The No. 2 U.S. carrier said it intended to increase its stake in Hanjin Kal Corp, which owns about 30% of Korean Air, to 10% over time, after receiving regulatory approval.
It did not disclose how much it paid for the 4.3% stake, worth about $88 million, according to current market prices.
Delta’s stake purchase was intended to ensure its partner’s “stable management rights”, Korean Air said in a statement.
Hanjin Kal shares fell as much as 7.1% on Friday. Korean Air fell 1.4 percent and its budget affiliate Jin Air Co Ltd rose 0.2 percent in the wider market that was down 0.2% as of 1225 GMT.
Delta has said it sees Seoul’s Incheon International Airport, the hub of Korean Air, as a gateway for more destinations across Asia.
The two airlines are members of the SkyTeam alliance and formed a joint venture last year that includes 290 U.S. destinations and over 80 in Asia. This year, Delta launched routes to Seoul and Osaka in partnership with Korean Air, Hanjin Kal’s flagship unit.
“Long term, the partnership and the joint venture is strong in terms of size and there’s no reason to think it can’t grow substantially into the future,” Delta Chief Executive Ed Bastian said at an aviation summit earlier this month in Seoul.
Delta also owns stakes in Grupo Aeromexico, Air France KLM, China Eastern, Brazil’s Gol and Virgin Atlantic, and has been negotiating a stake in Alitalia.
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