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Delta Air Lines to buy into China Eastern for US$450m

Delta Air Lines keeps its interest in forging alliances with foreign carriers.

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Under a preliminary agreement, Delta will invest US$450 million to acquire a 3.55 per cent stake in China Eastern and will be given an observer seat on the Shanghai-based airline’s board of directors. Pairing up with China Eastern increases our reach and further cements our commitment to the market and to our customers who travel between China and the US.

Delta CEO Richard Anderson said Delta had been inviting China Eastern employees for the last three years to visit its headquarters in Atlanta for internship and learn from each other.

Delta, the world’s third-biggest airline, has longstanding ambitions to grow in China, where it trails the leading U.S. carrier into that country, United Continental Holdings Inc.

The two carriers already have a codeshare agreement in place, now operating on 30 domestic US routes, 43 domestic China routes and seven transpacific routes between the US and China. The boards of both airlines still need to approve the deal, and the companies did not say when that is expected to happen.

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“The agreement with Delta is a major strategic measure of China Eastern to carry out reforms, explore and develop mixed ownership economy, while drive the airline’s global development”, said China Eastern Chairman Liu Shaoyong.

Delta Acquires Stake in China Eastern