nuff

Securities analyst visited KE and got information KE/DL joint venture for transpacific routes might be materialized in first half of 2014 after negotiation finished.

Since last June DL cut code share with KE, KE's load factor for those routes decreased about 5% during off-peak season.

Currently DL is market #2 after UA and KE is #3 , but JV will be #1 .

LINK (in Korean)

Dalat767

If it comes to fruition then it's a great new.

Tanaka07

This would give Delta an excuse to completely dehub NRT, seems like its going that way with SFO, PEK, PUS and ICN now gone or on the way out. With the passing of KE/DL JV i'd expect PDX/MSP/DTW-NRT to switch to ICN.

relangford

That is possible, but I'm not so sure. IMHO, I suspect a DL/KE JV would move a little traffic to ICN, but NRT still has a lot more connecting flights to Asia than ICN. Some passengers would have to overfly Japan only to return. Also, feelings seem strained between DL and KE over the KE ICN-ATL route (unless the JV would make even the number of flights each way). I suspect DL would keep MSP/DTW to NRT, at the least, maybe adding SEA or replacing PDX. I do note that DL has the U.S. government city pairs from ICN to just about anywhere, so a JV with KE would make sense by adding to the number of possible flights.

HawaiiO

What is meant by a joint venture?
Code sharing?

Or does JV mean cutting some flights where currently both KE and DL compete on?

Thanks

mikesaidyes

What's the sentiment over ICN-ATL? What happened exactly?

nuff

Both could happen like AA/JL or UA/NH do.

mtkeller

If the JV (which has been rumored for a couple years now) materializes, I expect DL will give up all fifth freedom routes out of NRT. There'd be no reason to operate their once-daily flights to HKG/SIN/BKK/MNL/TPE/PVG, since presumably the Republic of Korea would grant whatever routes from ICN to those cities DL and KE wanted DL to operate. I'm not sure how the GUM and SPN authorities are handled, so those might require something different. That said, ATL/JFK/DTW/LAX/SEA-NRT will almost surely remain, as there should be enough NRT-bound traffic for those routes. (For DTW, don't forget auto traffic, which is likely how DL sustains DTW-FRA and definitely DTW-NGO-MNL.)

A Joint Venture is better referred to as an anti-trust immunized joint venture. DL already has two of these: one with VS for UK-North America traffic and another with AF/KL/AZ for Europe (minus EU)-North America traffic. (TPAC, we have UA/NH in one JV and AA/JL in another. AA/BA/IB and UA/LH/AC have TATL JVs as well.) For regulatory purposes, the carriers operate as a single carrier, sharing profits/losses in proportion to flights/pax carried. They are allowed to coordinate schedules as much as they want to facilitate connections and switch out operating carriers on routes based on who has the best equipment for a given route. For example, DL operates EWR-AMS, a route that wouldn't make a lot of sense for them to fly were it not for the JV providing KL connections onward from AMS. Yes, they could codeshare, but they would not be allowed to coordinate schedules to optimize connections or discuss how much capacity they should have or harmonize fares.

TerryK

I found this rumor implausible as DL has pushed KE down to Tier 4 partner.

bobbybrown

Well, there is a Korean news article from a fairly reliable newspaper. It seems KE held an IR (investor relation?) on 28th, and KE said that KE is preparing to resume codeshares with DL and it will be much stronger than just a codeshare. And it is interpreted as a JV.

In the meantime, KE zero'ed out specific days of some American routes. It appears SEA will become 5/w for April and May, and DFW becomes 5/w for the whole summer season. (My friend tried to do sorta ZED for ICN-DFW and he was told booking is less than 40% this weekend.) ATL is already cut with reduced 380 operations for a while. I'm not sure where KE will deploy their near-10 380s because FRA won't be 380 this summer as well.

deltaflyinglawyer

Korean Air has posted an annual net loss of $US357 million in 2013.
Delta Air Lines posted a $2.7 billion net profit in 2013 excluding special items and boasted a 15% return on invested capital for the full year.
They can't be equal partners.
Korean Air is now trying to have a codeshare agreement with Delta again, after Delta terminated it last year.
Delta has a huge customers base in Japan. The JV between DL and KE is implausible. It is just a wishful thinking from the Korean side and from the newspaper in particular. KE also denied the rumor of the JV according to the newspaper.

deltaflyinglawyer

GMP-CJU


[QUOTE=bobbybrown;22243861 I'm not sure where KE will deploy their near-10 380s because FRA won't be 380 this summer as well.[/QUOTE]

skchin

Is GMP big enough to handle A380?

nuff

In Korea, ICN, GMP and CJU can handle A380.

mikesaidyes

I just flew GMP-CJU on a KE 747 and it was SLAM FULL. Like even first class. Korean Air could totally do it. Jeju tickets often sell out months in advance.