Delta Buys More Korean Air Shares In Battle To Control The Airline

Delta has increased its stake in Korean Air to 11% and may buy more if it needs to. They spent $49 million for the additional 1% stake. It was only last June they made their first 4.3% investment.

There’s currently a power struggle for the airline, with dissident shareholders controlling 37.08% of the company.

The current airline Chairman and the family that has owned the carrier hold 22.45%. Executives at the company hold about 5.8%. With Delta’s stake that brings their total to 39.25% of Hanjin KAL.

Under South Korean law if Delta took its stake above 15% it would have to register as a business combination triggering legal scrutiny. Delta can still increase their stake by 4% without triggering legal scrutiny.

The shareholders meeting of Korean Air’s parent company will be held March 24, where the chairman will be up for re-election. The increased shareholding won’t affect this vote – voting at the meeting will be based on ownership as of December 26, 2019. However “holding more shares of Hanjin KAL is meant to brace…for what happens after the meeting.”

Delta has dismantled its Tokyo Narita hub and now funnels transpacific traffic through Seoul having initially twisted Korean’s arm into a deal. In addition to owning a piece of Korean Air, Delta owns stakes in Aeromexico, China Eastern, LATAM, Air France KLM and Virgin Atlantic. These investments both help Delta align the interests of those carriers with their own, and diversify their exposure beyond the U.S. market.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Great news All premium seats will be Delta One
    They will get rid of first class and make sure all redemption seats are 500,000 miles and up each way
    Delta blows

  2. Hmmmm, it appears that Delta needs Korean Air and Korean Air does not need Delta. Things have changed lately. Korean has an code share with AA and Alaska and an interline agreement with Jetblue.
    Korean is a great airline, so maybe they should look at other partners besides Delta.

  3. Sad… they won’t see much revenue from ICN in 2020Q1 thru 2020Q3. Delta just issued waiver for travel to/from/thru ICN. So, they should perhaps invest more in rebuilding a new hub in HND, or ramp up HNL to serve all Asia Pacific. Dismantling of the entire Asian network is an insult to NWA’s legacy.

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