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Delta Makes Deal To Buy 49 Percent Of Virgin Atlantic

Filed by KOSU News in Business.
December 11, 2012

Looking to grab more of “the lucrative New York-to-London market,” Delta Air Lines said today that it plans to spend $360 million for a 49 percent stake in Virgin Atlantic.

As USA Today writes:

“The deal would give Delta greater appeal to premium-paying passengers doing business across the Atlantic. ‘There’s no question the whole focus of this deal … was helping Delta get more access to London,’ said travel analyst Henry Harteveldt. ‘It’s the most important international business market outside North America.’ “

According to The Wall Street Journal, “Delta’s deal with Virgin will enable its passengers to connect to Virgin’s long-haul routes out of London and take advantage of some new domestic short-haul flights the U.K. carrier plans to add next year.”

The New York Times adds that “Delta and Virgin Atlantic said they would apply for antitrust immunity from American and European competition authorities in order to coordinate fares and flight schedules, as well as offer seats on each other’s planes.”

It’s not easy to get more landing and takeoff rights at London’s Heathrow Airport, as the Times notes:

“British Airways dominates Heathrow, with 53 percent of the slots, followed by Lufthansa of Germany, with 5.6 percent, and Virgin with 3.3 percent. American and United each have 2.3 percent. British Airways’ hold on the airport actually increased in the last year after it completed the acquisition of British Midland International from Lufthansa.”

The Delta-Virgin deal will need to get OKs from U.S. and European aviation regulators. [Copyright 2012 National Public Radio]

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