Delta Air Lines seeks to tap growing US-Korea route demand

BY SEO JI-EUN, Korea JoongAng Daily - For Delta Air Lines, Korea is a crucial Asian hub connecting two continents seamlessly, and the demand for U.S-Korea routes will likely keep increasing thanks to active investments between the two countries, says Peter Carter, the Atlanta-based airline’s executive vice president of external affairs.

This is made possible through Delta's joint venture partnership with Korean Air, a vital component of Delta's endeavor to strengthen its presence in the Asia-Pacific region.

Today, the two airlines connect more than 290 destinations in the Americas and over 80 destinations in Asia in 44 countries from the combined network, including direct flights to 13 U.S. cities.

Geographically, Korea's favorable location as the first point of entry for North American travelers to Asia, facilitated by Incheon International Airport, enhances its appeal. Korea's cultural influence also continues to expand worldwide, while Korean businesses make substantial inroads into the United States. In fact, in Delta's home state of Georgia, Korea has emerged as the largest overseas investor, with substantial investments in various sectors, including electric vehicle manufacturing and renewable energy.

Incheon International Airport, with its excellent reputation and efficient layover system, is considered another critical component of Korea's significance in Delta's growth strategy. As one of the world's premier airports, Terminal 2 serves as the dedicated home for the Delta-Korean Air joint venture partnership, offering seamless connections with low connection times that are as short as 45 minutes.

Celebrating the fifth anniversary of the Delta-Korean Air joint venture, The Korea JoongAng Daily had an exclusive interview with Carter in Seoul on Thursday, where he shared Delta's plans and their commitment to expanding their presence in Korea. Below are edited excerpts from the interview.

Q. Can you provide an overview of Delta Air Lines’ operation in Korea?

A. We are the largest U.S. airline serving Korea, and that's mainly due to our joint venture with Korean Air. Ten years ago, we only served the Incheon-Detroit route. But since partnering with Korean Air, we have expanded our services to three more cities: Atlanta, Minneapolis, and Seattle. Korean Air has also expanded its footprint as well, adding Boston as a destination. We've also collaborated with both governments. One exciting pilot project we are working on is when a passenger flying with Delta checks in a bag at Incheon and is transferring at Atlanta, they do not have to reclaim that bag as they are transiting. Instead, the bag will be checked through to wherever their final destination is. We have also established a joint service desk at the airport. A Korean Air customer purchasing a ticket for a Delta flight can approach the Korean Air desk and talk to a Korean Air gate agent, and vice versa. We want to make sure that there's a single source of truth and information and resolve customer concerns promptly, particularly during irregular operations such as flight cancellations or rerouting due to weather events. Today we celebrate the five-year anniversary of the joint venture. We are at a place where, together with Korean Air, we have served and connected over 7 million passengers over these years. We have a bunch of projects and are about 70 percent there. But it is like painting the Forth Bridge — we will always find more ways to make the experience seamless, including language support, and ultimately, we want to have zero friction for our customers. 

Q. ​What key factors led Delta Air Lines to choose Korean Air as a strategic partner for the airline partnership?

A. The one thing that impressed us about Korean Air is its deep commitment to serving customers. The customer experience on Korean Air is almost without an equal in the industry. The shared value of prioritizing customer service, safety, cleanliness, punctuality, and hospitality made them a great partner. The great thing about a relationship like this is the reciprocal learning we engage in.  Another crucial factor is Incheon’s strategic position as a prime connectivity hub for Asia, with Korean Air serving diverse destinations from Incheon. There are over 2,000 passengers connecting through Incheon International Airport every day, which is tremendous, and also a growth of over 40 percent compared to five years ago. The airline industry is a business of efficient networks, and the hub is the way that efficiency is achieved with a connecting time of 45 minutes, which is amazing. This allows passengers to get to where they want to go as quickly as they can, and that is a huge customer benefit.

Q. ​​How do you view Korea’s position within Delta’s global growth strategy?

A. ​It is remarkable how much direct foreign investment there is from Korea to the United States. In our home state of Georgia, for instance, there is $12.5 billion worth of projects, including Hyundai Motor looking to build a battery manufacturing plant, Hanwha Q Cells’ solar panel factories, and Hyundai Motor and SK On’s joint investment for an EV plant. Even the Korean president has traveled to Atlanta to meet with our governor. We're not seeing the same level of direct foreign investment from Japan. What is remarkable is that the Korean car manufacturers have put a flag in the ground in the U.S. in a way that has elevated their presence and garnered more appreciation and attention than Japanese car manufacturers, which the opposite used to be true in the U.S. There's a real transformation, and it reflects Korea’s leadership in technology. When I come to Seoul, I'll see it here, and six months, eight months or a year later, I'll see it in the United States. And that's something the country should take great pride in.

Q. ​Reflecting on Delta's merger with Northwest Airlines in 2008, what key lessons or insights can Delta share regarding the challenges and opportunities of a major airline merger? How do you envision the potential merger between Korean Air and Asiana Airlines impacting the existing joint venture?

A.​ Our experience with the merger of Delta and Northwest Airlines was truly a game changer for Delta. It provided us with a greater scope and scale as an operation, leveraging the strengths of both companies. Mergers, especially in the airline industry, require a ton of work. But when executed well, as demonstrated by Delta and Northwest, they can provide enormous benefits to consumers such as expanded service coverage. If the merger between Korean Air and Asiana Airlines goes through, it will provide consumers with a wider range of choices. While the U.S. Justice Department is famously critical of any business combinations, I understand that the Korean government has been supportive of this merger, which is incredibly important. And something that I'm sure the U.S. government is aware of, too. I think that's all positive, and hope that the Justice Department doesn't file a lawsuit.  Regulators have commonly asked airlines to provide remedies during mergers as a common tool to address competition concerns. And you would hope that regulators are able to see the incredible associated consumer benefits as well. So I wish them all the best of luck.

Q. ​Regarding Delta Air Lines' recent legal dispute on flight caps at Amsterdam Airport Schiphol, what advice can you provide for dealing with similar environmental challenges in different regions worldwide, such as the construction of another airport on Jeju Island in Korea?

A.​ ​ I'm not familiar with the specific situation on Jeju Island, but addressing concerns about airport locations and their impact on local communities should ideally involve all stakeholders in finding the best solution. The long-term interests of an area could be taken into account. Our belief at Delta is that individuals should not have to choose between saving the world and exploring it, but they should be able to do both. The global agreement and framework for the industry exist because countries recognize the importance of global connectivity and open skies. Without a global compact, local authorities, like the Schiphol airport authority, would impose their own narrow and self-interested restrictions on airlines. Global standards and organizations like the International Air Transport Association are necessary to ensure safety and efficiency in the airline industry. Our view is that capping the number of movements on a local level is a violation of the open skies and bilateral agreements, which makes travel challenging. We are committed to becoming a net-zero airline by 2050, and one of Delta’s key strategies is upgrading our aircraft to larger, more fuel-efficient aircraft that burn 25 percent less fuel than smaller, less efficient ones. But we cannot do that unless we are operating in an efficient manner and are not hindered by local restrictions that limit our ability to fly to certain destinations. 

Source: https://koreajoongangdaily.joins.com/2023/06/07/business/industry/Delta-Air-Lines-interview-Peter-Carter/20230607060007777.html

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