Delta building its brand as the most Chinese-friendly US airline
Please use three words to describe China’s changes in the past 40 years.
Growth, industrialization and globalization.
What are the biggest achievements in China since the introduction of the reform and opening-up policy 40 years ago?
The past four decades in China represent an era of affluence, as the general population’s living standards have risen at a steady pace. As a result, many industries have expanded rapidly. Take the tourism industry and the China-US aviation market for example, foreign countries have become increasingly popular holiday destinations for Chinese people, with the United States serving as one of the major destinations.
In addition, a growing number of middle and high-income Chinese are opting to study in the US. The 10-year multiple-entry business and tourist visa agreement signed between China and the US in 2014 has boosted the number of Chinese departing to the US. These factors, plus the growing demand for business travel between the two countries, have led to rising demand in the China-US aviation market.
As one of the world’s leading airline companies, Delta is dedicated to expanding our business in China and serving these growing market needs, while building our brand as the most Chinese-friendly US airline.
What’s the biggest challenge China faces today and how can the country overcome it?
Minimizing environmental impact while maintaining economic growth and social progress is a big challenge China faces today. The private sector is an integral and important part of creating a blueprint for sustainability. Delta has long played a part by dedicating ongoing resources that drive toward sustainability.
For instance, we have just deployed our flagship A350 aircraft on half of all US-China nonstop daily flights. The A350 is a greener aircraft, with a 25 percent increase in fuel efficiency compared to our previous long-haul aircraft. Most recently, Delta announced plans to remove a variety of single-use plastic items, including plastic wraps, stir sticks, utensils and straws from its aircraft and its airport lounges at the airports in 2019.
How has your company benefited from China’s reform and opening-up policy?
The reform and opening-up have made China the largest growing market for the tourism and civil aviation industries. In 2017, China’s inbound and outbound tourists reached 139 million and 131 million, respectively.
Since late 2008, when Delta and Northwest Airlines merged into one global airline, Delta has been on a fast track to capture the growth opportunities in China. Before the merger, we had only one nonstop daily service linking the US and China, while today we have six. Our total seat capacity for US-China routes has increased over 10-fold since 2009.
In July this year, we launched our Shanghai-Atlanta nonstop daily service, which connects China’s most important commercial and industrial center with Delta’s hometown. Most recently, we announced a new nonstop daily service from Shanghai to Minneapolis-St Paul in 2020, pending government approval. Our nonstop daily services linking Beijing and Shanghai to Delta’s key hubs in the US, such as Atlanta, Seattle, Los Angeles and Detroit, provide customers with convenient travel experiences, and easy connections to an extensive range of destinations in the Americas.
Has competition intensified between your company and Chinese companies?
The aviation market in China is highly competitive, and we have been working hard to build Delta’s brand and differentiate ourselves through our robust network and convenient connections, extensive fleet, industry-leading operational reliability and customer focus.
But no single company can serve all market needs. Partnerships with other airlines allow Delta to reach secondary cities we could not serve on our own, due to market size, regulatory constraints and other factors. One of our key strategies in China is to expand codeshare services with our partner airlines to increase access to interior China.
We invested $450 million in 2015 to acquire a 3.55 percent stake in China Eastern Airlines and our partnership has made us better positioned to explore the vast China market and serve our Chinese and US customers. We now have over 1,800 round-trip Delta codeshare flights in China each week with our partners. We expect more cooperation with our Chinese partners in the future.
How do you view China’s role in the world today?
Given its large population and its growing economic strength, China is a critical part of the global business community. No global company can claim global success without success in China.
Could China’s experiences and practices be used to solve global problems?
As the world’s largest internet and smartphone market, China has seen the dramatic growth of e-commerce and mobile payment, which is reshaping the retail industry, bringing tremendous convenience and efficiency to consumers and the entire value chain.
As a global carrier dedicated to serving as a choice airline for Chinese customers, Delta is keeping pace with China’s changes in consumption. Delta is the first US airline to accept UnionPay and Alipay payment options on its website.
What measures are needed if China wants to deepen reforms?
Over the past four decades, China’s efforts to build a market-oriented economy have unleashed the power of the market and inspired entrepreneurship and innovation. As China continues to deepen reforms, the central government has given the market an even bigger and more decisive role to play in allocating resources.
Deepening the mixed-ownership reforms is an important step to revitalizing State-owned enterprises. The successful partnership between China Eastern and Delta is a good proof point. The two leading carriers now have close interactions in operation management and service upgrades. Together, we are stronger.
What is the most unforgettable experience you have had in China?
In the 1990s, when I was with Singapore Airlines, I spent quite a bit of time at the Guangzhou and Beijing airports. Then I came back to work in China in 2016 as Delta’s head of China. I was amazed to see the vast and rapid changes over those two decades.
Just imagine, all domestic and international departures and arrivals were once handled in one single terminal at the Beijing Capital International Airport. Today, even with Terminal 2 and Terminal 3, there is still room for further growth and opportunity. Now we are looking forward to the super large new Beijing Daxing International Airport. I am extremely excited about the business opportunities in China.
Apart from economic development, what progress in other fields have you witnessed in China in the past 40 years?
China has remarkable achievements in talent development, thanks to its emphasis on the higher education system. Enrollment in higher education increased from 2.7 percent (about 2 million students) in 1978 to 45 percent in 2017 (about 38 million students).
From my perspective, China provides an excellent talent pool for both domestic and international companies. Today, 90 percent of Delta employees in China are local Chinese people.
What will be the country’s “calling card” in the coming years?
Innovation will be one of China’s calling cards in the future. Today, China is striving to build its innovation capabilities as it redefines itself with various innovation initiatives.
Another calling card of China is its growing middle and high-income group, which is a dynamic driving force of economic and social transformation.