Delta Sees HUGE DOLLAR SIGNS in This Market
Delta Air Lines (NYSE:DAL) has invested $65 million in national and flagship Mexican airline Grupo Aeromexico, giving Delta a 4.17 percent stake in the Mexican airline and a seat on its Board of Directors.
Delta’s investment, cleared by the Mexican Federal Competition Commission (CFC), comprises the purchase of 30,182,855 shares of Grupo Aeromexico at 31 Mexican pesos per share — the same rate offered by the airline in its IPO. The investment paves the way for Grupo Aeromexico to go ahead with its expansion plans and also enhances its financial strength.
The deal creates the largest airline codesharing alliance in the U.S.-Mexican market, and marks the first investment by a global airline in a national Mexican carrier. Collectively, the alliance would offer 93 codeshare destinations (codeshare: an agreement between two airlines in which each sells tickets on the other airline’s flights) over 733 daily flights to eight countries. The partners would collaborate to ensure the best practices in all facets of the airlines’ operations, offering passengers a consistent travel experience on all their flights.
“Expanding the business relationship with our main partner and attracting foreign investment in Aeromexico is a matter of great pride for all of us that are part of the best airline in Mexico. This undoubtedly reflects Delta’s trust in our company and will allow us to serve a larger number of passengers through our global network,” said Andres Conesa, CEO of Grupo Aeromexico.
“The benefits of connectivity and strength are of great value to our customers worldwide,” said Richard Anderson, Delta’s Chief Executive Officer. “This agreement also represents a new stage in a key relationship, which we have been developing for years.”
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