Delta’s Partnership via Equity Strategy Takes an $81 Million Hit in Brazil
Photo Credit: A GOL-Delta promotion for Delta's pilot-training facilities in Atlanta. The words mean "through the window" in Portuguese. GOL Linhas Aéreas
Skift Take
When airlines such as Delta and Etihad opt to make investments in partner airlines around the globe instead of making acquisitions, which can trigger regulatory hassles, the investor carriers are going to be subject to economic turmoil in partners' domestic markets. That just goes with the territory.
Global airlines from Delta to Etihad are eschewing acquisitions these days in favor of making equity investments in global partners, and Delta's strategy has encountered a couple of speed bumps in Brazil and China.
In its first quarter Securities and Exchange Commission filing, Delta revealed that the political and economic crisis in Brazil, as well as GOL's lackluster financial performance, saw Delta's equity investment in GOL's parent decrease in value by $25 million and the Atlanta-based carrier took an $81 million loss in accumulated other comprehensive income/loss from it in the quarter.
In Delta's first-quarter earnings call, incoming CEO Ed Bastian said increasing the airline's globalization through taking equity stakes i
