The Details on Delta's Virgin Atlantic Deal
Dec 12th 2012 9:58PM
Updated Dec 12th 2012 10:12PM
Delta Air Lines
The joint venture will give Delta and Virgin Atlantic more flights at Heathrow Airport in England, the second busiest airport in Europe. Delta will now be able to compete for business travel in this market against United Airlines-Continental
The second biggest carrier in the world by passenger traffic, Delta will now be able to leverage Virgin Atlantic's luxury brand to increase revenue for flights in and out of London. The new union will be "very positive and accretive for our long-term partners ... KLW, Air France and Alitalia," according to Delta CEO Richard Anderson. Virgin Atlantic CEO Richard Branson was similarly bullish, stating that the deal, which was two years in the making, "signals a new era of expansion."
Delta and Virgin Atlantic will be applying for antitrust immunity that will allow for scheduling, fare pricing, and other joint operations. While there are concerns about resistance from the U.S. Department of Justice, American initiated its market-leading alliance with British Airways in 2010. That same year, United was also able to merge with Continental to create the world's largest airline.
According to Delta, the purchase from Singapore Airlines -- which bought its stake in Virgin Atlantic for $965 million in 1999 -- does not depend on receiving antitrust immunity. After the deal's announcement, Delta's share price rose more than 5%, to over $10.65.
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