China Airlines Crash Leads to Delay in Delta Alliance

A valuable business linkup between China Airlines and Delta Air Lines that was to start this week will be delayed as safety concerns were reignited in the weekend crash involving the Asian carrier.

Taiwan's largest airline, China Airlines operated in near isolation the last three years as a result of a spate of deadly crashes. That was to end Saturday with a flight-link deal with Delta that has now been delayed indefinitely, executives at the companies said. The delay is one of several financial blows the carrier will suffer in the wake of Saturday's accident...

China Airlines was set to mark its return to international acceptance with the new Delta partnership, an important step for the carrier's prestige and its finances. Under the deal, Delta would have placed its passengers on China Airlines flights to Taipei from Los Angeles and San Francisco.

Airlines have hustled to find partners in recent years as a vital tool to grab more passengers, especially business travelers. But China Airlines has been left out since U.S. carriers AMR Corp.'s American Airlines and Continental Airlines dropped the Taiwan carrier in 1999 amid growing scrutiny of the safety record of U.S. airlines' foreign partners. Delta suspended its agreement to put passengers on Korean Air Lines after a Korean Air crash that year.

U.S. regulators have since required U.S. airlines to conduct safety audits of their prospective partners before finalizing so-called code-sharing deals for airlines to market seats on each others' flights. Washington signed off on Delta's audit of China Airlines last month, and the Taiwan carrier had told analysts it expected the arrangement to boost annual revenue by more than 1.4 billion New Taiwan dollars (US$40.8 million). China Airlines also was quietly preparing to join the global SkyTeam alliance led by Delta and Air France late this year.

The alliance also includes Korean Air, with which Delta reactivated code-sharing links this month while hailing its safety improvements. Ties with China Airlines, however, will be held up indefinitely, airline officials said. "I don't have any idea when [the codeshare] might be rescheduled," said Burt Pinoli, Delta's area general manager. "That's pending a lot of different things as you might imagine." Added Paul C.Y. Wang, a China Airlines spokesman, "There's a long way to go" before SkyTeam membership.

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