Aeromexico planes at Mexico City international airport.

John Gress | Corbis | Getty Images

Delta Airlines spent years take stakes in foreign airlines from the United Kingdom to Chile to expand internationally and gain influence over these carriers. the Coronavirus pandemic upset those plans and prove costly as financial turmoil hits airlines around the world.

Foreign ownership rules prevent outright airline purchases from overseas, but capital investments and other partnerships have proven popular for carriers keen to access international markets.

But travel around the world has been particularly difficult during the pandemic, as carriers not only grapple with concerns about the virus, but outright travel bans. Delta’s domestic passenger revenue, which accounts for more than three-quarters of ticket sales, fell 93% in the second quarter from a year ago, but revenue fell 98% in Latin America and 97% for transatlantic routes.

Delta on Tuesday released a net loss of $ 5.7 billion for the second quarter, its biggest quarterly loss in 12 years. The Atlanta-based airline took $ 2.1 billion in fees related to some of those investments in foreign airlines. It wrote down $ 1.1 billion on its investment in LATAM Airlines, Latin America’s largest carrier, which filed for Chapter 11 bankruptcy protection in May, less than a year after Delta announced it was buying a 20% stake, wresting the carrier from its former partner, American.

It also suffered a $ 770 million depreciation of its investment in Aeromexico after suffering financial losses and the Mexican airline filed for Chapter 11 bankruptcy. And Delta took a charge of $ 200 million. on its investment in Virgin Atlantic.

Delta still has a framework in place for strategic partnerships with these airlines, which gives it greater reach in these markets and vice versa.

Delta noted that the governments of the airlines’ home countries had not provided financial support like the $ 50 billion in loans and direct federal aid set aside for U.S. airlines.

“While each of these is disappointing, none of our partner’s home countries were prepared to provide government financial support similar to what the US Treasury did with the CARES Act, which necessitated their decisions. restructuring, ”Delta CEO Ed Bastian said on a call for results. Tuesday. “We have the greatest confidence in all of our partners and remain firmly committed to our partnerships, which will be important as we rebuild a much more resilient international network in the recovery.”

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