Delta Airlines has spent the better part of years accumulating equity stakes in foreign airlines from the U.K to Chile to grow internationally and gain the better part of sway over other carriers. The current ongoing pandemic uprooted their plans as the expansion goals of the latter are proving extremely costly as the airline business have been hit the hardest air many countries across the world have suspended air-travel – National and International air-travel.
While foreign ownership rules prevent outright purchase of airline abroad however, equity investments and other partnerships have proved popular for airliners who are eager to gain access for international markets.However, the current global travel has been particularly challenging during the pandemic as airline carriers are struggling to grapple with concerns over the virus, as well as outright travel bans. Delta’s domestic passenger revenue dropped 93% during the second quarter during the second quarter of last year as revenues fell 98% in Latin America and 97% for trans-Atlantic routes were congested.
Delta on Tuesday posted a net loss of $5.7 billion loss for the second quarter, the largest quarterly loss for the airline carrier in 12 years. The Atlanta-based airline took $2.1 billion in charges which are tied to the investments in respect to foreign investments. It wrote down a check of $1.1 billion on its investment in LATAM Airlines, Latin America’s protection in May which are less than a year after Delta announced that it was buying a further stake of 20% after snatching the latter deal away from their previous partner America.
The second write down takes Delta Airline for a $770 million handout to their Aeromexico investment after suffering a financial losses as the Mexican airline filed for Chapter 11 – Bankruptcy protection Act. Delta American also took down a handout of $200 million to their investment in Virgin Atlantic.