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Delta Airlines to Invest $65 Million in Aeromexico

13 September, 2012

According to reports last week by
Reuters and the Wall Street Journal,CEO of Delta Airlines Richard Anderson has
announced that the company will buy a 3.6 percent stake in Aeromexico,one of
Mexico's premier air carriers,amounting to more than $65 million. Still
pending regulatory approval,the investment will also give Delta a seat on
Aeromexico's board and is expected to help both airline carriers increase
market share in Latin America during the continuing economic downturn.

“This only strengthens our
respective positions,” said Anderson. “The Mexican economy is doing quite
well.” The decision is partly motivated by the fact that Delta has been slowly
reducing the number of flights it offers to Europe and has been eyeing
expansion in Mexico and South America,due to stronger economies and increased
interest among travelers.

Aeromexico CEO Andres Conesa also
announced that both companies plan to invest a total of around $40 million in
creating a new maintenance facility in Mexico to aid them in this joint
venture. “It is a sign of confidence by Delta in Aeromexico,” she said. In
addition,both Conesa and Anderson would also like to partner with a third
South American carrier at some point in the future,according to the
reports. 

According to the reports,the long-term goal is for joint market share
between Delta and Aeromexico to grow to a combined 30 percent,up from its
current position at around 20 percent. Also of interest,Aeromexico recently
went public in April of 2011 and is the largest carrier in Mexico,while Delta
recently announced plans to order at least 200 new planes by the end of the
year,thanks to recent Boeing design innovations that allow its 737s to save a
significant amount of fuel.

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