China Eastern to expand Sino-Europe routes with AF-KLM stake

China Eastern Airlines chairman Liu Shaoyong said the carrier’s role in the new transatlantic joint venture (JV)—between Air France-KLM, US-based Delta Air Lines and the UK’s Virgin Atlantic—is to enhance its position in the Sino-Europe market.

The deal, announced July 27, includes Air France-KLM acquiring a 31% stake in Virgin and Atlanta-based Delta taking a 10% stake in Air France-KLM.

China Eastern is expected to purchase a 10% stake in Air France-KLM with a €375 million ($439 million) investment, the biggest overseas strategic investment for the Shanghai-based carrier. China Eastern would also appoint one director to Air France-KLM’s board.

Delta has a 3.2% stake in China Eastern. Air France-KLM, Delta and China Eastern are all SkyTeam global alliance members.

“China Eastern, Air France-KLM and Delta have established good cooperative relationships, which have laid a solid foundation for our strategic investment in Air France-KLM. We [three SkyTeam carriers] look forward to forging closer strategic cooperative partnerships on the global scale, and providing more convenient and higher quality air service for passengers on Sino-US routes, Sino-Europe routes and even around the world together with China Southern, Korean Air, Aeroflot and other SkyTeam members. We are quite confident of out cooperation outlook,” Liu said.

Both companies are committed to improving customer experience on Sino-Europe routes through reducing transfer time, sharing and improving airport infrastructures, and unifying service standards and procedures to realize seamless travel and smooth baggage handling. In addition, China Eastern also would upgrade the frequent flyer program with Air France-KLM and partner in fields including IT and MRO.

The Shanghai-based carrier also plans to fill its market gaps of Africa, Latin America and Caribbean countries through the cooperation with Air France-KLM.

As one of China’s big three carriers, China Eastern operates 67 weekly flights to nine European destinations, including Paris, Frankfurt, London, Rome, Amsterdam, Madrid, Prague, Moscow and St. Petersburg. China Eastern has become the third biggest carrier in the Sino-Europe market; in 2016 the carrier had an 8.5% of market share, up from 6.6% in 2014.