Delta invests $65 mn in Mexico’s leading airline

August 11th, 2011 - 11:54 am ICT by IANS  

Mexico City, Aug 11 (IANS/EFE) Delta Air Lines will acquire a 3.5 percent equity stake in No. 1 Mexican air carrier Aeromexico for $65 million as part of a long-term enhanced commercial alliance, the two airlines said Wednesday.

Delta CEO Richard Anderson and the chairman of Aeromexico’s board of directors, Jose Luis Barraza, said the two companies signed a memorandum of understanding that solidifies the partnership they have maintained since the mid-1990s as members of the SkyTeam global airline alliance.

The deepened ties include codesharing for “all Delta and Aeromexico flights between the US and Mexico, as well as flights within the carriers’ domestic networks and to other key international destinations”, the airlines said in a press release.

“Aeromexico has been a strong partner for Delta in Mexico and Latin America, and this reinforces our relationship,” Anderson said.

“By forming an exclusive long-term commercial partnership, we will leverage the strengths of our two networks to provide expanded customer benefits and build the foundation for a joint venture to better serve the US and Mexico marketplace.”

The Delta boss recalled that Aeromexico has achieved solid financial results after a successful restructuring in 2009, including its highest operating margin in 15 years in the second quarter of this year.

As part of the stake purchase, to be completed over the next 60 days, Delta will gain a seat on Aeromexico’s board, he added.

Aeromexico’s share of the Mexico-US passenger market currently stands at 20 percent and is expected to climb to 30 percent over a period of five years with the signing of this memorandum, according to Grupo Aeromexico CEO Andres Conesa.

One immediate result of the enhanced commercial alliance is that Aeromexico will begin operating flights on the Mexico City-Atlanta route starting this year.

The alliance also includes the expansion of a maintenance center via a $40 million joint venture in which Aeromexico and Atlanta-based Delta will contribute half of the total investment.

Conesa said Aeromexico currently has three maintenance lines at its center in the western city of Guadalajara and will add four more with this new investment, which also will create roughly 800 jobs.

The two SkyTeam alliance members have had a codesharing agreement since 1994 and will see their total number of code shares rise from about 500 to approximately 700 under the new agreement, he said.

Grupo Aeromexico comprises four subsidiaries that operate some 500 daily flights to cities in Mexico, the US, Canada, Central and South America, Europe and Asia.

Delta, the world’s largest airline, transports 160 million passengers annually and has more than 80,000 employees and a fleet of 700 aircraft.

–IANS/EFE
rd

Related Stories

    Posted in Uncategorized |

    Subscribe