Delta to buy 49 percent stake in Virgin Atlantic
ATLANTA -- Delta Air Lines is purchasing a 49 percent stake in Virgin Atlantic for $360 million. The deal is pending approval from regulators in the United States and Europe.
Delta is purchasing a share currently owned by Singapore Airlines. Virgin Group and Richard Branson will continue to hold a majority stake (51 percent) and Virgin Atlantic Airways will maintain its brand and operating certificate, according to Delta.
"Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the U.K., particularly on the New York-London route, which is the largest airline route between the U.S. and Europe," Delta CEO Richard Anderson said in a statement. "By combining the strengths of our two companies in a joint venture, we can provide customers with a seamless network between North America and the U.K., and continue building a better airline for our customers, employees and shareholders."
According to Delta, the agreement also includes:
- 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 cooperation 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.
- Shared access to Delta Sky Club and Virgin Atlantic Clubhouse airport lounges for elite passengers.
"Consumers will reap the rewards of this partnership between two great airline brands on services from the UK to the USA, Canada and Mexico through a shared ethos in the highest standards of customer service," Virgin Atlantic Chief Executive Steve Ridgway said in a statement. "This joint venture will deliver much more effective competition at Heathrow.
"Both airlines are confident that the Department of Transportation will be as convinced as we are of the extensive consumer benefits arising from this joint venture, with expedited approval being granted by the end of 2013," Ridgway added. "The trans-Atlantic market is Virgin Atlantic's heartland - it's where we started. By aligning with Delta we can continue to grow our North American network and offer greatly enhanced connectivity across the USA."
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