Delta acquiring 49% of Virgin Atlantic

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



As part of the joint venture agreement, Delta will invest $360 million in Virgin Atlantic, acquiring a 49 per cent stake currently held by Singapore Airlines.



Virgin Group and Sir Richard Branson will retain the majority 51 per cent stake and Virgin Atlantic Airways will retain its brand and operating certificate.



According to a joint press release, 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.



The agreement also calls for 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, with a combined total of nine daily round-trip flights from London Heathrow to John F. Kennedy International Airport and Newark Liberty International Airport.



The airlines will file an application with the U.S. Department of Transportation for antitrust immunity, which will allow a closer relationship and coordination on schedules and operations, the release said.



The transaction also will be reviewed by the U.S. 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.



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