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Delta expects Korean Air tie-up approval by June

Delta Air Lines expects South Korean regulatory approval of its proposed joint venture with Korean Air in the first half of this year, says chief executive Ed Bastian.

The SkyTeam Alliance carriers plan to begin implementing the partnership, which will allow them to more closely coordinate transpacific flying, as soon as they receive the approval, he says during a quarterly earnings presentation today. However, he does not provide a target launch date.

Delta and Korean Air received US regulatory approval for the tie-up in November 2017.

The airlines will be able to coordinate schedules and fares between South Korea and the USA, jointly sell and market their flights, and share revenues under the planned partnership.

However, US regulators have barred them from being exclusive partners in the market. For example, Delta cannot stop Korean Air from codesharing with Hawaiian Airlines and vice versa.

The move was a small win for JetBlue Airways and Hawaiian Airlines, which opposed the US Department of Transportation's approval of the Delta-Korean Air partnership without a new public review of the proposed joint venture.

Delta plans to leverage Korean Air's Seoul Incheon hub for its into Asia traffic under the new partnership. It relaunched flights from Atlanta to Seoul in June 2017 under an expanded codeshare partnership, and could shift more capacity to the market as it continues to pull down its Tokyo Narita hub.

The Atlanta-based carrier said in December 2017 it can serve 80 cities in Asia with 32 aircraft under a partnership with Korean Air today, versus just 10 cities with 36 aircraft under its former Tokyo hub structure.

Korean Air is just one of several carriers that Delta is forging closer ties with. It announced a new joint venture with WestJet in December with plans to seek regulatory approval for the new tie up later in 2018, and is in the approvals process for a more comprehensive transatlantic partnership with Air France, Alitalia, KLM and Virgin Atlantic Airways.

Delta forecasts roughly $275 million in additional revenue from its global partnerships in 2018 compared to 2016, its December investor aay presentation shows. This is expected to jump to $550 million in 2019 with the implementation of the Korean Air and possible WestJet joint ventures.

Delta and Korean Air signed their joint venture agreement in June 2017.

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