Correction of the Week: Delta and Korean’s Spat

Jun 14, 2013

More Reading on This Topic: Delta, Korean Air

Last week I wrote about how Delta had cut back on awarding elite qualifying miles. Most notably, travelers who purchase tickets on Korean will no longer be able to earn elite qualifying miles in Delta’s program at all. Delta kept pointing to its email statement saying that each airline determines if it participates with Delta, so I assumed Delta jacked up the compensation it required and Korean balked.

I was wrong. (And apparently Delta is, at best, bending the truth about how these decisions are made.)

I’ve heard from multiple sources now that, in fact, Delta simply shut it off. Korean wasn’t given an option. Airline Weekly suggests that this is a pressure tactic by Delta to try to push Korean to form a joint venture, and I’ve heard others speculate the same.

What do you think is going on here?

Brett

31 responses to “Correction of the Week: Delta and Korean’s Spat”

Neil S

Jun 14, 2013 at 4:49 am

Most of the comments here come from people far more qualified to answer this kind of stuff, but what choice does Korean really have?

oneworld and Star already have Asia pretty well covered with partners, Delta is strong, and Korean probably doesn’t want to go it alone.

Do the other alliances need KE? And would their Asian partners accept KE in? If they even have a vote?

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1. Shane
  
  Jun 14, 2013 at 6:09 am
  
  KE is probably stuck with SkyTeam even if they wanted to explore other options. Star has Asiana and ANA. OneWorld has JAL and Cathay, which pretty much brackets South Korea.
  
  It does seem like a bad move by Delta in the short term. Unless you are in a city that flies to Seoul nonstop, many travelers would probably switch to United or AA to get there, Even if there is a nonstop flight, those are a lot of miles to give up vs a few hours lost to a layover (14.5 hrs nonstop vs 16.5-19 hrs & 7500 miles each way)
  
  Reply
2. CF
  
  Jun 14, 2013 at 11:58 am
  
  Neil S – Clearly Star won’t work with Asiana there, but I would bet they could find a way to coexist with JAL in oneworld if the competition people approve. But I don’t know that it’s the issue. Korean isn’t backed into a corner or they would have capitulated and given in to Delta. Besides, they have non-alliance options. I was surprised to see a codeshare with LAN on my flight home from Seoul. Bilaterals could add a lot of value.
  
  Reply
Bits ‘n Pieces for June 14, 2013 – View from the Wing

Jun 14, 2013 at 5:01 am

[…] says that isn’t what happened at all, that it wasn’t Korean’s choice but rather a unilateral decision by Delta possibly to try to force Korean to join a joint business […]

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Nick Barnard

Jun 14, 2013 at 5:34 am

I really think we should ask the NSA whats going on. Their database contains the emails with this information.

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1. MeanMeosh
  
  Jun 14, 2013 at 6:55 am
  
  Ba-zing! Good one, Nick. I’m going to remember that one the next time someone claims they “can’t find that e-mail” or “don’t recall the contents of that conversation”….
  
  Reply
MeanMeosh

Jun 14, 2013 at 7:04 am

The rumors you’ve been hearing seem plausible to me; it just sounds like something DL would do. The only difference here is that instead of capitulating, KE decided to give a big Italian salute in the direction of ATL. I tend to agree with the other posters that KE doesn’t exactly have a ton of options as far as other alliances go, with one exception. AA just started non-stops from DFW-ICN, so it wouldn’t surprise me if USAA tried to entice KE with some limited codesharing/reciprocal benefits within short perimeters of ICN and DFW.

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David SF eastbay

Jun 14, 2013 at 7:31 am

In North American KE flys to SEA/SFO/LAX/LAS/YVR/HNL/NY/IAD/ORD/DFW/ATL. Except for ATL which is a true DL fortress, LAX would be next with enough DL service to aid KE with onward connections. UA would actually be a better partner option for KE then DL.

Maybe it’s time for KE to rethink its business plan (i.e. EK/QF in DXB) and do what is best for them and not do something to be part of a larger alliance that may not provide much for them in the wallet where it counts.

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1. A
  
  Jun 14, 2013 at 7:57 am
  
  But Delta only flies to ICN from Detroit. ATL, SEA, LAX make sense as codeshare flights where DL can give feed to KE. Not sure from where UA or AA take their metal into ICN but I’m guessing KE is making a profit on routes from their hubs at SFO, ORD, DFW.
  
  I have several friends that fly to asia on business quite often. Most of them have told me ICN is much preferred for connections than NRT…and actually add a connection to fly them over DL.
  
  Reply
2. malbarda
  
  Jun 14, 2013 at 9:18 am
  
  I think it is only a matter of time before EK and their Mid East brethren break up existing global airlines. It may well end up leaving all the existing alliances in tatters.
  
  I think the QF move is telling in that respect. Imagine a world with EK in a leading position, partnered with QF, KAL (or any other leading Asian (=Chinese) carrier), JetBlue and a major European and LatAm carrier. I would say that is compelling, although untangling a European player from the current alliances would be difficult.
  
  Interesting to note that Etihad now has partnered with KLM/Air France and Air Berlin. Can you say “writing on the wall”?
  
  Reply
A

Jun 14, 2013 at 7:33 am

Grrr, I swear that I used to be able to find flights to ICN on Delta.com that were codeshares on Korean out of ORD. Can’t find that anymore. My lady friend actually has been clamoring to get over to Korea and we’ve been looking at options for many months now.

Would rather not fly on Delta metal through DTW. Oddly enough, Orbitz shows me Korean flights through ORD and DFW with domestic connections on AA. I fully admit that being based at MSP I’d like to bulk up on skypesos but not at the expense of a transpacific flight in coach on Delta.

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1. Hole0
  
  Jul 28, 2013 at 4:23 pm
  
  KE and DL have terminated their SPA and codeshare agreements with the exception of a few beyond destinations to Latin America for KE marketing. The fight between these two is heating up.
  
  Reply
James A

Jun 14, 2013 at 9:29 am

Very disappointed with Delta. What is the point of Skyteam if you treat your alliance partners like this when it comes to mileage?
However instead of pushing me onto Delta flights, this will have me go out and join KE’s SKYPASS program or maybe even another Skyteam program like AeroMexico. I fly enough premium tickets so earning elite level wont be hard. KE’s gain, DL’s loss.

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Samman

Jun 14, 2013 at 9:39 am

The ICN hub is awesome place to connect, and frankly I’d take KE anyday versus DL’s own transpac service. Maybe this is what Delta saw? More and more customers opting for KE vs DL’s own flights.
Anyhow, with this move and having already attained my DL elite status this year, maybe I ought to explore other options for Pacific flying instead. Star always seemed a strong option with its own ICN hub carrier, plus likes of NH, SQ, TG and soon EVA Air joining. Or like James above, maybe I’ll stick with KE directly by joining their program.

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Scott

Jun 14, 2013 at 10:05 am

Hum… if Delta did, in fact, just “shut it off”, then I don’t know how you could say Delta is “bending the truth” when they repeatedly state each airline chooses its own level of participation — it’s just a bold face lie, plain and simple!

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1. CF
  
  Jun 14, 2013 at 12:00 pm
  
  Scott – Well, you can always twist the truth. I suppose Delta could argue that it gave Korean the option of joining a joint venture (if that’s the sticking point here) and Korean made the decision not to participate. Is that an outright lie? Not technically.
  
  Reply
  1. Scott
    
    Jun 14, 2013 at 2:56 pm
    
    Well, extortion is providing someone with a choice… but it’s also a crime. I’m not saying Delta has gone as far as extortion here… I’m merely pointing-out that there is a widely-accepted difference between “here are your options for level of participation in our program and the associated cost” and “enter into a JV with us, or else”.
    
    If Delta’s demotion of KE in the SM program was the consequence of an unrelated ultimatum by Delta that KE agree to a JV or else suffer unrelated consequences… that’s not the same as giving KE a choice of participation level in my view. But, for all I know, KE couldn’t care less about this development… in which case, no harm no foul.
    
    Reply
BigD

Jun 14, 2013 at 11:02 am

Yet another reason why SkyPesos is becoming a worthless program.

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Robert

Jun 14, 2013 at 11:40 am

F..k Delta. Period!!!

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chinger

Jun 14, 2013 at 11:54 am

Business is business, but I can’t help but think that, if the rumors are true, Delta is, at best, being very mean spirited about this. They are supposed to be partners after all.

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Axelsarkis

Jun 14, 2013 at 12:15 pm

DL probably felt that their SkyPesos members where getting over-entitled, so…

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NYDave

Jun 14, 2013 at 1:52 pm

Its interesting airlines are creating alliances within alliances.
Just because KE might be a large and founding member of Skyteam, it must not be “cool enough” to be part of the Delta sub click.
Pretty lame and arrogant move imo by DL if true.

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TravelBloggerBuzz

Jun 14, 2013 at 3:09 pm

Unbelievable! Just when you thought it could not get any worse…it does. 5.5 months and one penny given to Delta and proud of it (Gold/Plat since mid 90’s, former NWA fan)
Hello free agency:-)

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1. Robert
  
  Jun 14, 2013 at 6:29 pm
  
  Wow. That DL/NW merger. What a mistake.
  
  Reply
  1. malbarda
    
    Jun 17, 2013 at 3:12 pm
    
    Not really. DL is a very healthy airline. Profitable: quarter 1 2013 profit of $85 million (http://www.nasdaq.com/aspx/call-transcript.aspx?StoryId=1362881&Title=delta-air-lines-management-discusses-q1-2013-results-earnings-call-transcript). Consensus that their product on long haul is pretty good and competitive. We just don’t like their FF program so much anymore. For that to change, you need to vote with your wallet but despite people always talking about that, it rarely happens in the real world where (as Cranky always says) in the end convenience and price rules.
    
    Reply
MonteK

Jun 14, 2013 at 5:17 pm

Delta the scrooge

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DesertGhost

Jun 14, 2013 at 6:16 pm

Maybe Korean should join oneworld?

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nealo

Jun 14, 2013 at 11:20 pm

The shoes keep dropping with more negative news about the SkyPeso program.

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Jun 16, 2013 at 9:02 am

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Delta and Korean Escalate Their Fight – >> The Cranky Flier

Sep 5, 2013 at 3:46 am

[…] fight apparently began when Delta tried to push its SkyTeam partner into joining a joint venture. It’s believed Korean wasn’t interested. So, as the story goes, Delta started to […]

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Sep 6, 2013 at 8:20 am

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