Originally Posted by
Sorry Dog
I don't recall ever hearing about Chapter 11 being referenced in a business plan as a competitive advantage or as a path to being a *market leader...
*lawyers or law firms not included
'Sorry Dog' speaking of competitive advantage perhaps you can shed some light on this.
Delta spent $450m investing in a 3.55% share of China Eastern in 2015, an airline underwritten by the Chinese govt and thus able to benefit from the buying power of said govt.
To underscore this, yesterday the the Chinese govt through the China Aviation Supplies Holding Company ordered 140 Airbus aircraft (100 320's & 40 350's) at a value of $23bn. The CAS Co has not yet revealed who these aircraft will be allocated to. China Eastern et al don't buy these aircraft- the Chinese govt do on their behalf.
This is a prime example of a govt directly underwriting and supporting a Chinese airline that Delta is a shareholder of. The pricing power of the govt purchase also reduces the price of these govt supported airlines pay as against purely commercial entities in Asia that must compete with the Chinese on Asia/EU & Asia/US routes.
Because China Eastern is part owned by Delta and a code share with Delta - this govt subsidy is obviously not an issue for Delta.
The Chinese govt supporting the growth of Chinese airlines is in the national interests of China. Fair enough, not any different than other countries I can think of.
So why is it ok in Delta's view - for the Chinese govt to subsidize an airline they partly own - if they are against govt subsidies?
Note: Wikipedia- China Eastern Airlines Group, is a state-owned enterprise that was supervised by State-owned Assets Supervision and Administration Commission of the State Council.