Delta eyes Asia growth, return to Shanghai

Since then, it has completed the integration of flight schedules with merger partner Northwest Airlines, including that carrier's extensive Asia network, and has expanded Chinese airline partnerships through its SkyTeam global alliance.

Now, Delta believes recovering demand for international travel and a broader network in China will make for a successful relaunch of the Atlanta-Shanghai route next June.

The economy "has picked up pretty substantially and our expectation is that it's going to continue into 2011." said Vinay Dube, Delta's senior vice president -- Asia Pacific. He said the broader Chinese airline partnerships will "be a game changer for us."

Those partners include Shanghai-based China Eastern and Shanghai Airlines as new SkyTeam members. As partners those carriers will increase the appeal of the route for travelers looking to connect in Shanghai to other cities in China.

Delta also gained an advantage with the full integration of Northwest's flight schedule with its own earlier this year, Dube said. The carrier now flies to 16 cities in Asia, from nine cities in the United States. Before the merger with Northwest, Delta flew to four cities in Asia.

Still, Delta is not launching the renewed Atlanta-Shanghai route with daily flights, as it did in 2008. When flights resume in June, they will operate two days a week.

"We've got to be cautious about how we grow our capacity," Dube said.

Coca-Cola Co. spokesman Kenth Kaerhoeg said Coke welcomes the restart of the Atlanta-Shanghai route for nonstop travel between the company's corporate headquarters in Atlanta and its business in China, where the company sells more Coke than in any other market besides the United States and Mexico.

Delta officials said they hope to later add more flights to the Atlanta-Shanghai route.

Beyond that, Dube said it's a step toward building more connections between Atlanta and Asia over the long term.

"Our restarting Atlanta-Shanghai is just the tip of the iceberg in terms of the next ten years," Dube said. "This is going to be one of several flights we have from Atlanta" to that region of Asia.

He said Delta's long-term Asian strategy is to connect Delta to the world's fastest growing economies, including those of China, Vietnam and other nations in Southeast Asia.

Delta's rivals are eyeing the same markets. Chicago-based United Airlines has bulked up its Asia network through its merger with Continental Airlines in October. United and American Airlines have both gained stronger positions in Japan through joint ventures with All Nippon Airways and Japan Airlines, respectively, which were granted antitrust immunity approval in November.

Delta attempted to lure Japan Airlines to SkyTeam but was unsuccessful. Delta already has a partnership with Korean Air, but is working to find ways to bolster its position in Japan, including exploring potential partnerships with smaller Japanese airlines. Delta also plans to launch new routes from Detroit and Los Angeles to Tokyo's Haneda Airport next February.

Delta had a greater advantage through its acquisition of Northwest's Asia network before a new U.S.-Japan Open Skies agreement signed in October that further opened the market to competitors, said airline consultant Bob Mann.

"Lots of things have changed," Mann said. Delta's focus on China and southeast Asia over the long term "is really a focus on where the future revenue growth is going to be," he said.

Still, many questions about China remain, Mann noted.

With China, "To a certain degree you have to not be risk averse," Mann said. But, "I'm not sure you'd want to go push all your chips into the middle."