Chapter 593： Comprehensive pros and cons

"I hope Mr. Yang promises me and will help me become the president of Korean Air after the event is completed!"

Zhao Xian'e was very confident and seemed to have taken Yang Cheng's position. She was none other than her.

However, Yang Cheng didn't think so. Although Zhao Xian'e was very different from what he expected, it was not enough to win Yang Cheng's trust. You can rest assured that such a large company will be handed over to an arrogant person!

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

In the trans-Pacific market, there are not many companies that Delta Air Lines can choose to cooperate with. The airline companies second only to Korean Air are EVA Air and Cathay Pacific. The two are currently in the absence of partner support. , Independently responding to the great changes in the market, but Cathay Pacific and Evergreen Airlines have grown in scale, each accounting for 7% of the market share, followed by Air Canada (6%), Z Guoji Airlines and Z Guodongfang Aviation (5% each).

Among them, Air Canada, State Z International Airlines and State Z Dongfang Airlines have a broader cooperative relationship. According to the current situation, several parties are likely to join the camp of airline joint operations in the long term.

Of course, Delta Air Lines is not without a little room to intervene. However, if China International Airlines and Dongfang Airlines are to reach a joint airline cooperation with American airline companies, they first need to sign an open skies agreement between China and the United States, which prevents a group of China and the United States carry out extensive joint ventures and cooperation, and choose Japan, South Korea or Hong Kong's airline companies next.

Therefore, it is unlikely that Delta will cooperate with these airline companies and their airlines. If Korean Air is missed, Delta Air Lines can only continue to fight alone in the Pacific market. This is not what Yang Cheng wants to see. After Yuanshan entered Delta Air Lines, it was necessary to bring immediate performance to gain a firm foothold. Otherwise, the pressure of “discrimination” in all aspects would follow, which could definitely be suppressed. Capital can't get through!

And Delta's biggest competitor, the All Nippon Airways and United Airlines joint venture, and the RB Airlines-American joint venture are not monolithic.

First of all, American Airlines and RB Airlines need to achieve greater scale expansion, but the oneworld alliance of the two parties 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 biased towards the southern hemisphere, and the long distance restricts a series of cooperation possibilities.

Cathay Pacific has never liked to form a close cooperative relationship, and it is currently preparing for its own restructuring. It has no time to take care of American Airlines and RB Airlines. At present, the two companies pay as much attention to the trans-Pacific market as Delta Airlines. There is also an urgent need for an airline company that meets the requirements to join the joint venture, but this does not seem to be easy.

Similarly, even if Delta Air Lines and Korean Air reach a cooperation, it will not be able to see results quickly. After all, no matter what the cooperation is, it takes time to run in.

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

If Delta Air Lines and Korean Air can successfully cooperate, although they are lagging behind others, in the future, the two sides will develop more joint airline cooperation. If they can seize the opportunity, the two sides will develop into close partners and successfully exert each other. All the advantages, then, the content of cooperation between the two will be more extensive than the two rivals.

However, even with a variety of high-quality network and financial indicators, there is one content that cannot be underestimated, because it can create and destroy partnerships. That is the human factor and how the management of the two sides will run in with each other.

This is why Zhao Xian'e made a seemingly reasonable request, and Yang Cheng fell into deep thought, frowning all the time, and couldn't speak affirmatively!

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

Assuming that Delta Air Lines and Korean Air, based on their current route networks, will operate flights from 14 North American cities in the hub of Seoul.

Like the American Airlines-RB airline joint venture and the United Airlines-All Nippon Airways joint venture once opened new routes, the airline joint venture can also promote Delta Air Lines and Korean Air to open up more destinations. Delta Air Lines itself only operates 7 A direct flight from a North American city to Asia, so it will benefit more from Korean Air’s existing and extensive North American network. Currently, Delta Air Lines only operates daily flights to Seoul in Seattle and Detroit. flight.

All Nippon Airways and United Airlines, as well as the joint ventures of RB Airlines and American Airlines, both operate flights jointly at Tokyo Narita Airport and Haneda Airport. However, once Korean Air and Delta Air Lines cooperate, it will be different. Both parties will only operate in Seoul. The airport is a hub that operates joint airline flights.

Even from the perspective of RB domestic transit flights, Haneda Airport lacks some advantages, because the domestic terminal and the international terminal of this airport are separate and require bus transfers, while Renchuan Airport can be in the same terminal. It is a big advantage to transfer flights from RB small and medium-sized cities within.

In addition, the operating cost of Korean Air is much lower than that of All Nippon Airways and RB Airlines. This will directly affect the pricing strategy of the latter two in the joint operation of airlines. At the same time, it will also have an indirect impact, because All Nippon Airways and RB Airlines The high cost has led 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 are unable to expand more efficiently in these markets due to their high cost base.

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

However, both parties are able to sell country Z flights at any time outside the scope of the joint airline cooperation. Korean Air operates flights in 25 cities in the mainland of country Z, and its number of destinations on the mainland of country Z is twice that of All Nippon Airways or RB Airlines. Many, but from the perspective of flight volume and capacity alone, the gap between All Nippon Airways and Korean Air is not too big.

The inability to cover country Z with its influence will have an unpredictable change 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, although country Z is a major driving force for market transformation, other parts of Asia, especially Southeast Asia, should also be taken seriously.

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

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

All Nippon Airways and United Airlines have achieved the same effect in the course of joint venture cooperation. United Airlines has transported a large number of passengers arriving from Tokyo, which allows ANA to expand around Southeast Asia.

However, there is another flaw that Yang Cheng thinks 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 a data survey, he found that from the perspective of local passenger volume, the RB-U.S. market is still far larger in absolute numbers than the Korean-U.S. market. In 2014, there were 4.4 million bilateral tourists between RB and the U.S. There will be more than 2 million tourists between South Korea and the United States.

However, the Korean-US market is growing rapidly The business fundamentals also show that South Korea will have stronger growth than RB. Although the Korean-US market is only 53% of the RB-US market, Korea Aviation has an advantage because of its overwhelming monopoly in South Korea, while ANA and RB Airlines are evenly divided in the RB market and their partners.

The number of tourists in various markets confirms the importance of points of sale in Asia and also shows that Delta Air Lines urgently needs to have stronger business growth throughout Asia. This year, the number of U.S. tourists to South Korea is expected to account for 30% of the U.S. and South Korea market The number of tourists from South Korea to the United States accounts for 70%, and the imbalance in the U.S. and Japan markets is even more serious. Among them, RB tourists to the United States account for 78%, and reverse tourists account for only 22%.

This means that once the joint venture cooperation between Delta Air Lines and Korean Air is reached, it will immediately cut off a large piece of cake in the East Asia-U.S. route, and this delicious cake is enough to make Delta Air Lines' board of directors dream of laughing. Come.

Don’t forget that the cooperation between Yang Cheng and Zhao Xian’e is not just a joint venture between the two parties. If successful, Delta Air Lines will become the largest shareholder of Korean Air. In other words, no matter what Korean Air can gain from the cooperation between the two parties All benefits must be shared with Delta Air Lines.

Therefore, after summing up all the pros and cons, Yang Cheng decided to seize the fleeting opportunity in front of him. First, Zhao Xian'e, the X factor, would promote the cooperation between the two parties. After getting the results, we will discuss whether she is a qualified person. Managers.

After more than ten minutes of deliberation, Yang Cheng finally raised her head, nodded in Zhao Xian'e's expectant and excited eyes, and said with a spring breeze, "Miss Zhao, I hope we have a happy cooperation!"

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