A VALU­ABLE PART­NER­SHIP

Delta Air Lines ea­ger to bol­ster col­lab­o­ra­tion with China East­ern Air­lines to ex­pand its pres­ence in the world’s fastest grow­ing avi­a­tion mar­ket

China Daily (USA) - - SHANGHAI - By WANG YING in Shang­hai wang_y­ing@chi­nadaily.com.cn

Delta Air Lines may have in­creased its ca­pac­ity seven times in China over the past eight years, but its great­est achieve­ment to date is ac­tu­ally build­ing a part­ner­ship with Shang­hai-based China East­ern Air­lines, said Steve Sear, pres­i­dent of in­ter­na­tional at Delta Air Lines.

Sear ex­plained that Delta’s part­ner­ship with China East­ern has en­abled the two air­lines to grow to­gether in terms of rev­enue and num­ber of routes as well as boost cus­tomer ex­pe­ri­ences. Work­ing to­gether has also pro­vided the US com­pany with in­sights into how air­ports in China are de­vel­op­ing.

Sear added that Delta is con­fi­dent of the new route it plans to launch be­tween Shang­hai and At­lanta in July 2018, say­ing the US com­pany will ben­e­fit from China East­ern’s loyal cus­tomers.

In late July, China East­ern Air Hold­ing Co and Delta Air Lines an­nounced that they would each buy a 10 per­cent stake in Air France-KLM Group for about 375 mil­lion eu­ros ($450 mil­lion).

The new col­lab­o­ra­tion is ex­pected to fur­ther en­hance the part­ner­ship be­tween the three air­lines. Delta Air Lines in 2015 ac­quired a 3.55 per­cent stake in China East­ern.

“Our goal is to have the best China partner in the largest and fastest grow­ing mar­ket in the world, the best part­ners in Europe cov­er­ing four of the top five mar­kets, Vir­gin At­lantic, Air France-KLM and Al­i­talia, and the best US car­rier, Delta Air Lines. We like this global cov­er­age and we want to fur­ther deepen those part­ner­ships,” said Sear.

Ac­cord­ing to Sear, China is the fastest grow­ing avi­a­tion mar­ket in the world and is re­garded as the cor­ner­stone of the At­lanta-based com­pany’s growth strat­egy. Delta main­tained a dou­ble-digit growth last year and the China mar­ket is ex­pected to be its largest rev­enue con­trib­u­tor in the Asi­aPa­cific re­gion.

In 2009, Delta’s daily ca­pac­ity in China was a mere 265 seats. Today, the com­pany’s ca­pac­ity has ex­panded to 1,600 as flights be­tween China the United States be­come among the most prof­itable routes in global avi­a­tion. In fact, the num­ber of Sino-US routes in­creased 180 per­cent be­tween 2010 and 2016, ac­cord­ing to the Guangzhou Daily.

Di­rect flight pas­sen­gers, who make up the core of avi­a­tion trav­el­ers be­tween China and the US, soared from 4.68 mil­lion in 2014 to 6.43 mil­lion last year, ac­cord­ing to in­dus­trial an­a­lyst Li Yan­wei. As of 2016, there were 13 Chi­nese air­ports op­er­at­ing 63 routes to the United States. Shang­hai Pudong In­ter­na­tional Air­port and Bei­jing Cap­i­tal In­ter­na­tional Air­port dom­i­nated the mar­ket by op­er­at­ing flights to 17 and 15 US air­ports re­spec­tively.

Three years ago, tick­ets bought in China made up 30 per­cent of the traf­fic be­tween the US and China. Ac­cord­ing to Sear, this fig­ure would be re­versed by 2020 when China is ex­pected to ac­count for 70 per­cent of the traf­fic be­tween the two coun­tries.

“In fact, it is ex­pected that Shang­hai will over­take London as the num­ber one mar­ket be­tween the US and any in­ter­na­tional des­ti­na­tion by 2020,” said Sear.

Yu Nan, an in­dus­trial an­a­lyst at Haitong Se­cu­ri­ties, said such a pro­jec­tion is based on the fast-grow­ing Sino-US tourism mar­ket. Some of the fac­tors be­hind the growth is the con­tin­u­ously ex­pand­ing trade vol­ume be­tween the world’s largest economies, the 10-year visa pol­icy for Chi­nese peo­ple vis­it­ing the US, and the greater num­ber of Chi­nese go­ing to the US to study.

This rapid growth can be seen in Shang­hai as well. Sear said the city has dra­mat­i­cally changed since he first vis­ited it 12 years ago.

“When I look at the sec­ond tallest build­ing in the world (Shang­hai Tower), it is a re­minder of the amount of growth that’s here, and Shang­hai is still grow­ing at an in­cred­i­ble rate. There’s an en­ergy about the city that is very sim­i­lar to the one in New York. And that’s what I like when I visit the city,” he said.

Our goal is to have the best China partner in the largest and fastest grow­ing mar­ket in the world.” Steve Sear, pres­i­dent of in­ter­na­tional at Delta Air Lines

PRO­VIDED TO CHINA DAILY

Steve Sear, pres­i­dent of in­ter­na­tional at Delta Air Lines.

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