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American airline Delta goes East, with a $450 million investment and a 3.55 percent stake in China Eastern Airlines

American airline, Delta Air Lines will be buying 3.55 percent of China Eastern Airlines Corp Ltd. The deal will mark the first in a US carrier owning part of a Chinese airline and may also prompt Delta’s competitors to make similar moves of pushing partnerships with Chinese carriers in an effort to secure their place in a country that Delta expects to become the biggest market for travel from the United States. Delta’s coming together with China Eastern will threaten United Continental Holdings, which is the leading US airline for service to China. According to reports once US and China negotiate an Open Skies agreement that would ease air route restrictions, United Airlines will explore a Chinese joint venture. For now, Delta has said it will invest $450 million in China Eastern’s Hong Kong-traded stock and also get an observer seat on China Eastern’s board. The move may pave the way for Delta and China Eastern to seek approval to coordinate pricing and flight capacity.

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Delta Air Lines,China Eastern Airlines Corp Ltd.,United Continental Holdings,Open Skies agreement