On Thursday, Delta Air Lines Inc. and China Eastern Airlines Corp. announced that they will each buy 10% stakes of Air France in steps to deepen an alliance.
Simultaneously, Air France will purchase a stake in Virgin Atlantic Airways Ltd.
Delta and China Eastern will acquire their stakes for US$876 million and Air France will pay US$287 million for its stake in Virgin Atlantic.
Though government-imposed ownership caps limit outright mergers for most airlines, these tie-ups should allow all four companies to coordinate timetables and fares for some routes and should also allow them to combine frequent flyer programs.
The tie-ups are expected to finish next year, allowing the arrangements to be implemented no later than 2019.
Full Content: Bloomberg
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