Delta’s $1.2 Billion Investment in Aeromexico, Latam Airlines, and Virgin Atlantic

Delta Air Lines will invest $1.2 billion in different international airlines. This includes Aeromexico, Latam Airlines Group, and Virgin Atlantic. Each carrier emerged from either Chapter 11 bankruptcy or restructuring. The $1.2 billion investment in international partner airlines will give Delta a 20% equity stake in Aeromexico, a 10% stake of Latam, and 49% ownership of Virgin Atlantic.

Before Aeromexico’s restructuring plan, Delta had a 49% equity stake at the airline. It also had a previous 20% share in Latam while Delta maintained the 49% equity stake at Virgin Atlantic.

Delta lost its previous investments during Latam and Aeromexico’s Chapter 11 proceedings. And also, the same thing happened with Virgin Atlantic when it was restructured.

$1.2 Billion Investment after Substantial Losses

Delta had substantial losses during their prior investments to the international airlines. The carrier invested $360 million to Virgin Atlantic in 2012 while it invested $1.9 billion in Latam in 2019. Delta also lost $770 from its Aeromexico investment in 2020.

Delta CEO Ed Bastian said that “These strategic investments in our partners will transform our ability to improve travel”. He added that this allows Delta “ to deliver a seamless travel experience alongside offering customers an unrivaled network between North American and premier markets worldwide”.

International Travel is Back

Delta’s latest announcement shows the carrier’s optimism in today’s international travel demand. That is even if the rules for international travel keep on changing. The omicron variant prompted the US to ban visitors from multiple African countries on November 29.

Also, starting Monday, the US will implement its stricter testing policy for inbound travelers. The new rules will require travelers to get tested a day before their departure date. This will include vaccinated travelers and US citizens.

Virgin Atlantic CEO Shai Weiss expects the airline to become profitable again by 2023. And with Delta and Virgin Group’s investment, Weiss is confident that it can weather disruption brought by the omicron variant.