Delta and Virgin Atlantic to form strategic alliance

Delta Air Lines and Virgin Atlantic Airways Ltd. have reached an agreement for a new joint venture that will create an expanded trans-Atlantic network and enhance competition between the UK and North America, offering greater benefits for customers travelling on those routes.   

As part of this joint venture agreement, Delta will invest US$360 million in Virgin Atlantic, acquiring a 49% stake currently held by Singapore Airlines. Virgin Group and Sir Richard Branson will retain the majority 51% stake and Virgin Atlantic Airways will retain its brand and operating certificate.

Highlights of the agreement include:

·A fully integrated joint venture that will operate on a “metal neutral” basis with both airlines sharing the costs and revenues from all joint venture flights.

·A combined trans-Atlantic network between the United Kingdom and North America with 31 peak-day round-trip flights.

·Enhanced benefits for customers including co-operation on services between New York and London, with a combined total of nine daily round-trip flights from London-Heathrow to John F. Kennedy International Airport and Newark Liberty International Airport.

Reciprocal frequent flyer benefits and shared access to Delta Sky Club and Virgin Atlantic Clubhouse airport lounges for elite passengers.

The airlines will file an application with the US Department of Transportation for anti-trust 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 share purchase and the joint venture are expected to be implemented by the end of 2013.