American Airlines Gets Played By Delta — Again

American Airlines keeps playing Delta’s ‘greater fool’.

Delta has had an India strategy, so it makes sense they don’t want Qatar, Emirates, and Etihad expanding in the U.S. or offering low prices. They’re partnering closely with Jet Airways, a relationship they took out from under American.

Meanwhile American signed on to Delta’s lobbying campaign against those three Middle Eastern airlines — and for good measure rejected a bid from Qatar to buy a stake in American and even went so far as to announce the termination of their codeshare relationships with Etihad and Qatar, depriving themselves of their own reach into India, Pakistan and the surrounding region.

Delta bought a stake into the most heavily subsidized Chinese airline, China Eastern, despite objecting to competition from subsidized airlines. That’s it’s big play in China.

Since other airlines take to basically copying Delta’s strategies American bought a stake in China Southern. I wrote yesterday that that didn’t seem to be working out as well for American as hoped. They’re launching only a fraction of the codeshares anticipating in their DOT filing a year ago. And now we know why… Delta.

China Southern is a member of SkyTeam. Delta has pretty much told them to kiss off from the alliance now that they’re getting closer to American and Delta has chosen China Eastern as its bride instead.

Nonetheless since China Southern is still in SkyTeam it turns out they’re subject to limits on codesharing outside the alliance. That means the alliance can prevent them from growing the hoped-for American Airlines codeshares.

That’s not a Delta decision alone, but Delta has joints ventures with or stakes in SkyTeam members Air France, KLM, Alitalia, China Eastern and Korean. They exercise tremendous weight in the alliance and have checkmated American’s growth in China through its own ownership stake, at least pending China Southern’s departure from SkyTeam (which would require Cathay Pacific’s assent if it were to enter oneworld).

One wonders how long it will be until American realizes that following Delta’s lead, and copying their moves, doesn’t make for a great strategy. American seems to be playing checkers while Delta is playing chess.

(HT: One Mile at a Time)

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 InsideFlyer.com, 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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Comments

  1. “and for good measure rejected a big from Qatar to buy a stake in American ” Do you mean “”and for good measure rejected a bid from Qatar to buy a stake in American “

  2. “bid” not “big”
    “assent” not “ascent”

    Your blog would be a bit more attractive with better proof-reading. Hope it stays successful.

  3. He’s trying to appeal to all readers, including trump deplorables, so grammar is not really a big issue.

    The “very stable genius” comment above is just precious…

  4. Why bother proofreading when y’all can do it for him? Funny that there’s more comments about the proofread than the subject matter… 🙂

  5. Lmao. The comments are great on this one.

    I don’t see this being Delta’s fool, rather it is an exercise of contractural agreements in place with SkyTeam. In the short run, they have to scale back. The real fool, likely you, will be when AA is able to respond with some sort of strategic move. Unlike your blog, AA can’t just pull something from out of their you know what.

  6. @ Gary — Delta stabs everyone in the back. They will get theirs one day. What goes around, comes around. Looking forward to seeing them pay the price for their greed.

  7. @Gene – When’s the last time Delta has “gotten theirs”? They have a VERY extensive history of screwing others over (whether those others are airlines, employees, or their passengers) while staying dry. No evidence that’s going to change anytime soon.

  8. Um, something tells me that AA is not at all surprised by the China Southern machinations and is playing the long game in China. Your posts regarding that airline increasing read like airline revenge porn.

  9. I’m no Delta apologist but come on @jon, DL runs a business! DL is savvy in the business world…if I were an airline investor who would I choose to invest with, a strategic DL or a flopping AA? And I’d argue that AA thought its actions were in ITS OWN best interest and they certainly weren’t doing DL a favor by following along. It seems that AA has no good international strategy and reacts to DL’s actions, and @iahphx that will only bite AA in the future.

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