Delta Spends $1.2 Billion To Lock In Influence At 3 Airlines

After receiving around $10 billion in direct payments from taxpayers, the airline is spreading its cash around the world. Delta is investing $1.2 billion in three airlines where it’s held an equity stake:

  • Virgin Atlantic: maintain its 49% stake

  • Aeromexico: 20% ownership (at one point the target was 49%)

  • LATAM: 10% ownership (down from the pre-bankruptcy 20%)

Delta affirms that there’s no change to its ownership positions in Air France KLM, China Eastern, or Korean Air.

Before the pandemic Delta saw the U.S. market as mature and limited, but it had opportunities for growth around the world. Instead of focusing on alliances, it took stakes in foreign carriers to give them tighter control and greater participation in upside.

Their Latin American play was huge. They increased their stake in Korean two years ago to ensure control. Korean had resisted a joint venture with Delta for years and Delta punished them, refusing to incentivize its customers to travel on the South Korean carrier. Delta is a tough negotiator, ‘in a 50-50 deal Delta takes the hyphen’ (with partners, suppliers, and with customers).

Potential investments haven’t always worked out. Delta considered a stake in Jet Airways before that Indian carrier went bankrupt. They negotiated for a stake in Italy’s restructuring of Alitalia but walked away from that deal as well.

Airlines historically haven’t been great buys for investors. They haven’t been great buys for other airlines, either. And derivative strategies where other airlines invest in airlines because Delta’s doing it tend to wind up even worse, like American taking a stake in China Southern because Delta invested in China Eastern.

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 »

More articles by Gary Leff »


  1. The real issue is that no US airline needed anywhere near the amount of government aid that they were given. US credit markets were frozen in the early days of covid and airlines were at major risk of bankruptcy if those credit markets were not reopened. However, almost as soon as the first round of government aid came out, Delta and Southwest were both able to pull down about $10 billion in credit within a couple months. Because of union pressure and the unwillingness of legislators to say “enough is enough” to airlines including from Texas where two of the big 4 airlines are headquartered, airlines got multiple more rounds of aid.

    There were also government loans which other airlines took above the grants (which included partial loans and stock warrants for the government) but Delta did not take those loans.

    Every airline can justify that they used the government aid to pay salaries which was what the aid was intended to do.
    Delta can also easily justify that it used its own credit to invest in other airlines.
    Attempting to say that airlines can’t invest in their business because they received government aid has to logically also include not investing in new aircraft. and yet no one has said that is illegal. There are rules about investing in other equities as well as buying back your own stock. As much as it pains some to admit, Delta has not violated has not violated those rules.

    Delta’s equity investments in key strategic regions of the world will yield enormous benefits. Given that Delta also used the covid era to transition its fleet to the most efficient international fleet of the big 3. Pre-covid, Delta had every intention of improving the profitabililty of its international operations, which trailed its domestic operations, and these investments in other airlines and fleet will go a long ways to meeting that goal.

  2. @FNT Delta Diamond – Delta didn’t lay anyone off. The government subsidies reimbursed Delta for payroll expense they were going to have anyway. So – yes – taxpayers gave Delta ten billion more or less free and clear, and then Delta spent a billion investing in foreign airlines.

  3. Gary,
    first, government aid to the airline industry is over. you and I agree that it went too far to begin with but you can’t argue that Delta or any other airline is now bound to rules that never existed.
    Second, airlines were never prohibited from investing in their businesses. American and United have both invested in unproven aircraft technologies during the pandemic, not even after government aid as Delta’s airline partner investments are. United also placed a massive order for aircraft and every airline has both used and new aircraft during the pandemic. As hard as it is to accept, investing in the core business was never prohibited.
    Finally, US airline execs are going to sit in the hot seat in Washington this week to explain why they couldn’t run better operations despite the tens of billions of aid they received. Given that Delta’s operational performance as verified by DOT data is heads and tails above its big 4 peers and better than every other US airline except Hawaiian – which isn’t even in the same league – Delta will have no problem explaining how it used government money and showing that it used that money to ensure that air service would be available as demand returns.

    I trust you will cover that hearing as well as the faux excuses that American, United and Southwest will offer for why their operational reliability is so much lower than Delta.

    Despite the disappointment of some, the government is not investigating airlines for buying aircraft during the pandemic, investing in questionable future aircraft projects, or investing in partner airlines.

Leave a Reply

Your email address will not be published.