Korean Air-Delta JV likely be cleared by H1

2018.03.22 15:04:24 | 2018.03.22 15:42:28

(From second left to right) Delta Air Lines International President Steve Sear, Delta Air Lines CEO Ed Bastian, Hanjin Group Chairman Cho Yang-ho, and Korean Air Lines CEO Cho Won-tae pose for a photo after signing a joint venture agreement in the U.S. on June 23, 2017. [Photo by Korean Air Lines]이미지 확대

(From second left to right) Delta Air Lines International President Steve Sear, Delta Air Lines CEO Ed Bastian, Hanjin Group Chairman Cho Yang-ho, and Korean Air Lines CEO Cho Won-tae pose for a photo after signing a joint venture agreement in the U.S. on June 23, 2017. [Photo by Korean Air Lines]

A joint venture of South Korea’s largest full-service carrier Korean Air Line Co. and the U.S. Delta Air Lines Inc. is expected to gain conditional go-ahead from the Korean government and become serviceable in the first half at the earliest.

According to sources from the aviation industry on Wednesday, the Fair Trade Commission recently submitted its opinion for approval on the joint venture to the Ministry of Land, Infrastructure and Transport on the condition that the two airliners ensure partnership won’t be antitrust. The ministry is expected to give the final nod within this month after reviewing the FTC’s opinion. The partnership was cleared by the U.S. authorities in November last year.

The two airlines signed an agreement in June to set up a joint venture to jointly operate Asia-Pacific routes connecting 290 cities of the Americas and 80 cities in Asia.

The partnership can further elevate the country’s main gateway Incheon International Airport to a top global air hub, a long-time goal that the Korean government has been seeking to achieve.

A joint venture is the strongest form of marketing agreement in the global aviation industry. Code sharing, lowest level of aviation arrangement, allows carriers to jointly sell seats of their flights only, while an alliance arrangement, an upgrade from the code sharing agreement, allows partnering companies to share mileage and lounge services. A joint venture includes more than code sharing and alliance arrangements.

“If the joint venture is launched, Delta Air Lines would choose Incheon Airport more for transit over Japan’s Narita Airport and help enhance Incheon Airport’s global status,” said an official from the aviation industry.

Korean Air Line also expects its partnership with the world’s largest air carrier would help to draw more customers with added routes and schedules on top of shorter transit time.

Shares of Korean Air Line closed Thursday at 32.350 won, down 0.46 percent from the previous session.

By Moon Ji-woong and Choi Mira

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