Chapter 593 Comprehensive Pros and Cons

"I hope that Mr. Yang will promise me to help me become the chairman of Korean Air!"

Zhao Xian'e was very confident, as if she had decided on Yang Cheng, the position of president must belong to her.

However, Yang Cheng didn't see it that way. Although Zhao Xian'e was quite different from what he expected, it was not enough to win Yang Cheng's trust. Don't worry about handing over such a large company to an arrogant and domineering person!

However, Zhao Xian'e's attitude is also very clear. If she does not agree to this condition, she may not only not help persuade Zhao Lianghao, but will also try her best to prevent Yang Cheng and Zhao Lianghao from reaching a cooperation. This will be more troublesome!

In the trans-Pacific market, there are not many companies that Delta Air Lines can choose to cooperate with. The airlines that are second only to Korean Air are EVA Air and Cathay Pacific Airways. These two companies are currently without the support of partners. , to cope with the great changes in the market alone, but Cathay Pacific and EVA Air have grown in size, each accounting for 7% of the market share, followed by Air Canada (6%), Z International Airlines and Z Guofang Aviation (5% each).

Among them, Air Canada, Z International Airlines and Z Eastern Airlines have a relatively extensive cooperative relationship. According to the current situation, several parties are likely to join the camp of route joint ventures in the long run.

Of course, Delta Air Lines is not without a little room to intervene, but if Z International Airlines and China Eastern Airlines want to form a route joint venture with an American airline company, they first need to sign an open skies agreement between China and the United States, which prevents a group of Chinese and American airlines conduct extensive joint ventures, and the next best thing is to choose airlines from Japan, South Korea or Xiangjiang.

Therefore, it is unlikely that Delta will cooperate with these airlines and their routes in joint ventures. If they miss Korean Air, Delta will have to continue to fight alone in the Pacific market. This is not what Yang Cheng wants to see , after Yuanshan took over Delta Airlines, he must bring immediate results in order to gain a firm foothold quickly, otherwise, the pressure of 'discrimination' from all aspects will follow, and Yuanshan will definitely be able to suppress Capital can't get through!

And Delta's biggest rivals, the ANA-United JV and the RB Airlines-American JV, are not monolithic either.

First of all, American Airlines and RB Airlines need to achieve greater scale expansion, but the oneworld alliance they belong to cannot provide a solution for them. Malaysia Airlines does not have flights to North America. Then again, even if there are flights to North America The geographical location of the flight is too far to the southern hemisphere, and the long distance restricts a series of cooperation possibilities.

However, Cathay Pacific has never liked to form a close cooperative relationship, and it is still preparing for its own reorganization, and has no time to deal with American Airlines and RB Airlines. There is also an urgent need for an airline that meets the requirements to join the joint venture, but this does not seem to be easy to do.

Similarly, even if Delta Air Lines and Korean Air reach a cooperation, the results will not be seen quickly. After all, no matter what kind of cooperation it is, it will take time to adjust.

For example, in the cooperation between All Nippon Airways and United Airlines, and the cooperation between Japan Airlines and American Airlines, both parties have spent several years getting to know each other well, not just signing a contract.

If the cooperation between Delta Air Lines and Korean Air can be successful, although the start is lagging behind, the two parties will carry out more joint ventures in the future. If they can seize the opportunity, the two parties will develop into close partners and successfully play their respective roles. With all the advantages, the content of cooperation between the two will be more extensive than that of the two rivals.

However, even with all kinds of high-quality network and financial indicators, there is one element that cannot be underestimated, because it can make or break a partnership, and that is the human factor and how the management of both parties will work together.

This is why Zhao Xian'e made a seemingly reasonable request,

Yang Cheng fell into deep thought, frowning all the time and remained silent, the reason why he couldn't open his mouth to give an affirmative answer!

Currently, All Nippon Airways and United Airlines operate flights from 12 North American cities in Tokyo, the joint hub of both airlines, and American Airlines and RB Airlines also operate flights from 9 North American cities in Tokyo.

Assuming that Delta Air Lines and Korean Air join forces, based on the current route networks of both parties, they will operate flights from 14 North American cities at the hub in Seoul.

Like the American Airlines-RB airline joint venture and the United Airlines-ANA joint venture that have opened new routes, route joint ventures can also promote Delta and Korean Air to open more destinations. Delta itself only operates 7 Delta has direct flights to Asia from North American cities, so it will benefit more from Korean Air's existing and extensive North American network. Currently, Delta only operates two cities in Seattle and Detroit. flight.

All Nippon Airways and United Airlines, as well as the joint ventures of RB Airlines and American Airlines, operate flights at Tokyo Narita Airport and Haneda Airport at the same time, but once Korean Air and Delta Airlines cooperate, it will be different. The two parties will only operate flights at Seoul Renchuan The airport is a hub that operates airline co-operating flights.

Even from the point of view of RB’s domestic transfer flights, Haneda Airport still lacks advantages, because the airport’s domestic terminal is separate from the international terminal and requires a bus transfer, while Renchuan Airport can be in the same terminal It is a big advantage to transfer flights from small and medium-sized cities in RB.

In addition, the operating cost of Korean Air is much lower than that of All Nippon Airways and RB Airlines, which will directly affect the pricing strategies of the latter two in the route joint venture cooperation. The higher cost leads to a limited number of destinations and flights it can provide.

This is a very prominent problem in price-sensitive markets such as country Z, India, and Southeast Asia. All Nippon Airways and RB Airlines cannot expand more efficiently in these markets due to their high cost bases.

Of course, in addition to the advantages, the cooperation between Delta Air Lines and Korean Air also has unavoidable disadvantages, the most prominent of which is that the joint venture between the two airlines is unlikely to cover the country Z market. This is not absolute, but at least in the short term it is impossible .

However, the two parties can sell flights in country Z outside the scope of joint venture cooperation at any time. Korean Air operates flights to 25 cities in the mainland of country Z, and its number of destinations in the mainland of country Z is twice that of All Nippon Airways or RB Airlines. However, from the perspective of flight volume and capacity, the gap between All Nippon Airways and Korean Air is not too large.

The big disadvantage of not being able to cover country Z with influence will have unpredictable changes in the future prospects of the joint venture between the two parties. You must know that the development of the trans-Pacific market has always focused on country Z.

Of course, while country Z is a big driver of market shifts, other parts of Asia, especially Southeast Asia, should also be given attention.

As far as the Southeast Asian market is concerned, Korean Air has similar strong advantages in terms of the number of destinations, flight volume and seat capacity compared with All Nippon Airways and RB Airways.

Delta's ability to transport passengers and sales will create more transfer demand to Seoul and distant cities, so Korean Air can expand its far-reaching regional network.

The same effect has been achieved with ANA's joint venture with United Airlines, which saw a large number of inbound passengers from Tokyo, allowing ANA to expand around Southeast Asia.

However, there is another flaw that Yang Cheng feels cannot be ignored, because even if Delta Air Lines achieves a certain growth in Seoul, its scale in this hub will be much smaller than that of United Airlines in Tokyo.

When Yang Cheng did the data survey, he found that in terms of local passenger volume, the RB-U.S. market is still much larger than the Korea-U.S. market in absolute terms. In 2014, there were 4.4 million bilateral tourists between RB and the U.S. Between South Korea and the United States, there will be more than 2 million tourists.

However, the Korea-U.S. market is growing rapidly, and business fundamentals also show that Korea will have stronger growth than RB. Although the Korea-U.S. market is only 53% of the RB-U.S. market, Korean Air has an advantage. Because it occupies an overwhelming monopoly position in South Korea, and ANA and RB Airlines are evenly divided in the RB market and their partners.

Visitor numbers across markets confirm the importance of the Asian point of sale and demonstrate Delta's urgent need for stronger business growth across Asia, with U.S. visitors to South Korea expected to account for 30 percent of the U.S.-Korea market this year, while South Korea's tourists to the United States accounted for 70%, while the imbalance in the US and Japan markets was even more serious. Among them, RB's tourists to the United States accounted for 78%, and reverse tourists only accounted for 22%.

This means that once the Delta and Korean Air joint venture is reached, it will immediately cut a large piece of cake in the East Asia-US route, and this delicious cake is enough to make Delta's board of directors laugh out loud Come.

Don't forget, the cooperation between Yang Cheng and Zhao Xian'e is not just a joint venture between the two parties. If it is successful, Delta Air Lines will become the largest shareholder of Korean Air. Any benefits will be shared with Delta Airlines.

Therefore, after considering all the pros and cons, Yang Cheng decided to seize this fleeting opportunity in front of him, and let Zhao Xian'e, the X factor, come forward to promote the cooperation between the two parties. After getting the results, we will discuss whether she is a qualified the manager.

After more than ten minutes of deliberation, Yang Cheng finally raised his head, nodded heavily under Zhao Xian'e's expectant and excited eyes, and said with a smile on his face, "Miss Zhao, I hope we have a happy cooperation!"

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