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How the Airbus A380 Squeezes into the U.S. Airline Model

ATLANTA ( TheStreet) -- The Airbus A380 is a very big airplane, and the U.S. aviation system is very slowly growing into it -- even though not a single U.S. carrier has ordered one.

That growth was evident last week, when Atlanta Hartsfield-Jackson International Airport said it will start work on gate and runway improvements to accommodate Korean Air service to Seoul on an A380, seating 407 passengers. The airport says flights could begin as soon as January.
The U.S. aviation system is very slowly growing into the giant Airbus A380, even though not a single U.S. carrier has ordered one.

Whenever the flights begin, Korean would fly in full cooperation with its partner, Delta (DAL - Get Report), which operates the world's busiest hub at Atlanta. Delta also has a trans-Pacific joint venture with Korean, complete with antitrust immunity, enabling the carriers to schedule and price jointly, to split revenues and to code share, writing tickets on one another's flights.

The two airlines already partner on A380 flights from Seoul to Los Angeles and New York and code-share on Korean A380 flights from Seoul to Hong Kong. Additionally, Air France A380 flights from Paris to New York and Washington Dulles are part of a trans-Atlantic joint venture with Delta. In each case, Delta and its partners take advantage of partnership models that barely existed when the A380 first flew in 2007, soon after its positive reception on its first New York visit.

The obvious question here is: Why would Delta ever want to order an A380? Its partners can operate the aircraft and Delta can get many of the benefits.

Aviation consultant Robert Mann says that because U.S. law restricts foreign ownership of U.S. airlines (to 25% of voting shares and 33% of capital) immunized joint ventures and code-sharing, all within a global alliance, provide a default model for global carriers to pool their economic interests.

So far, the A380 serves five U.S. airports: New York Kennedy; San Francisco, Los Angeles, Washington Dulles; and Miami -- all top international gateways. It is flown by seven airlines: Air France, Korean and China Southern, members of the Skyteam Alliance; Lufthansa and Singapore, members of Star; Qantas, a member of Oneworld; and Emirates.
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