Virgin Atlantic and Delta, will begin their relationship with 31 roundtrip flights daily between the United Kingdom and North America
December 12, 2012 – On Tuesday, Delta Airlines agreed to purchase a 49% stake in Virgin Atlantic Airways, whose majority owner is Richard Branson. Singapore Airlines Ltd. has held the share Delta is acquiring. The price Delta is paying for the 49% is $360 million and their goal is to increase their share of the lucrative travel market that exists in the trans-Atlantic.
Virgin Atlantic, which is the biggest rival for long haul flights of leader British Airways at Heathrow Airport in London, and Delta, will begin their relationship with 31 roundtrip flights daily between the United Kingdom and North America. Those flights will be a joint venture between the two airlines.
The deal has Delta, based in Atlanta, in position to grab a bigger piece of the biggest market in the world of premium passengers. Brandon, the founder of Virgin, will retain control of the airline, but it ends the idea of go it alone that was the strategy for the billionaire from the UK since he founded the airline nearly 30 years ago.
An analyst in London said this acquisition by Delta does not change the airline industry but it gives them a nice slot in trans-Atlantic flights.
Singapore Airlines said it was contemplating its position for a period of time and that the investment, that is more than a decade old, has not lived up to their expectations and the synergies that both parties involved had hoped for.
Virgin and Delta will look to get antitrust immunity from airline and federal regulators, which would then give them the opportunity to coordinate their schedules, prices, share costs and revenues for the joint venture regardless of whose aircraft operates the routes.
There will be nine flights daily in the agreement from London’s Heathrow Airport to John F. Kennedy Airport in New York and Newark International Airport in New Jersey. The idea is to target the busiest routes between the U.S. and Europe.