Delta picks up 49% stake in Virgin Atlantic
Published: 12/12/2012 - Filed under: Home » News »
Delta Air Lines and Virgin Atlantic Airways Ltd. have announced an agreement to form a new joint venture, expanding Delta’s trans-Atlantic network and increasing the carrier’s presence at London’s critical Heathrow hub. For $360 million, Delta picks up a 49 percent stake in Virgin Atlantic currently held by Singapore Airlines. Virgin Group and founder Sir Richard Branson will retain the majority 51 percent stake and Virgin Atlantic Airways will retain its brand and operating certificate.
Describing the deal as “metal neutral,” Delta and Virgin say the combination will now offer 31 daily round-trip flights between North America and the UK, using Virgin Atlantic's base at London's Heathrow airport, including a combined total of nine daily round-trip flights from John F. Kennedy International Airport and Newark Liberty International Airport.
With limited takeoff and landing slots at Heathrow, the dominant US carrier on the lucrative New York-London route has been American Airlines through its membership in the oneworld Alliance, with its partner airline British Airways. Virgin Atlantic flies the second largest number of passengers at Heathrow.
The airlines will file an application with the US Department of Transportation for antitrust immunity, which will allow a closer relationship and coordination on schedules and operations. The transaction also will be reviewed by the US Department of Justice and the European Union's competition regulator and other relevant authorities. The carriers expect to have the joint venture in place by the end of 2013.
The deal may also give Virgin Atlantic incentive to consider joining the SkyTeam alliance anchored by Delta and its main European partner, Air France-KLM. According to press reports, a decision by Virgin Atlantic about such a move could be coming in the next few months.
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