Delta Air Lines Deepens Ties With European Partners
Delta Air Lines (NYSE: DAL) is looking to cozy up even more with its biggest trans-Atlantic partners. Under a deal announced last week, Delta will take a 10% stake in joint venture partner Air France-KLM, while Air France-KLM will buy 31% of Virgin Atlantic (Delta's British partner). The three airline operators also plan to form a new combined joint venture.
These deals should foster even greater cooperation among the airlines. Virgin Atlantic -- being far smaller than the others -- has the most to gain. But that means Delta Air Lines is poised to profit, too, because it already owns a 49% stake in Virgin Atlantic.
All three U.S. legacy carriers have made broad use of antitrust-immunized joint ventures with foreign airlines to serve international markets. These allow U.S. carriers to offer more flight options to customers, while reducing competition -- a proven tactic for boosting profitability.
Source: Fool.com
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