Delta Air Lines and Korean Air have signed a much-anticipated joint venture agreement, beginning the process of coordinating services across the Pacific.
The agreement will allow the SkyTeam members to coordinate schedules and pricing, jointly sell and market flights, and share revenues and costs between South Korea and the USA.
"Today's relationship will allow our two companies to fully integrate from a customer standpoint," says Ed Bastian, chief executive of Delta, at a signing ceremony in Los Angeles today.
Delta passengers will have access to 80 destinations in Asia beyond Korean Air's Seoul Incheon hub under the partnership, he says.
China, however, will not be included in the joint venture, says Bastian. He adds that it does not impact Delta's relationship with China Eastern Airlines.
"The synergies will be good for our customers, our companies and our countries," says YH Cho, chairman of Korean Air, at the event.
Korean Air will benefit from expanded access to the US market on Delta under the agreement, he says.
The accord will allow Delta and Korean Air to more effectively compete with the immunised partnerships between American Airlines and Japan Airlines, and United Airlines and All Nippon Airways. Without partners on either side of the Pacific, both SkyTeam carriers lack the feed that their competitors have access to through their respective joint ventures.
Expansion may be in the cards for Delta and Korean Air down the road. Delta could add new service to Seoul Incheon in the future, however, this would likely occur once the immunised partnership is implemented, says Bastian.
Delta serves Seoul from Atlanta, which began earlier this month, as well as from Detroit and Seattle Tacoma.
Cho declines to comment on whether Korean Air plans to expand service to North America.
Korean Air serves 13 cities in North America, including Atlanta, Los Angeles and New York John F Kennedy all of which are Delta hubs.
The Delta-Korean Air joint venture is subject to regulatory approval in both South Korea and the USA. While the airlines have antitrust immunity in the USA, they need to update the approval with US regulators, says Bastian.
The carriers are "very optimistic" that the South Korean government will approve the accord, says Walter Cho, chief operating officer of Korean Air, at the event.
Both Delta and Korean Air decline to comment on a timeline for the joint venture.
The airlines have been working towards an agreement for some time. They signed a memorandum of understanding towards forming a joint venture in March, which followed an expanded codeshare agreement in 2016.
Delta and Korean Air have been partners for more than 20 years.