Delta has acquired a 49-percent stake in Virgin Atlantic Airways for $360 million, forming a joint venture focused on North America-U.K. routings.
Specifically, Delta is purchasing the stake previously held by Singapore Airlines, and Virgin Atlantic is expected to continue operating under its own brand. Officials hope the U.S. Department of Transportation and European Commission will approve the deal by early 2013.
"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," Richard
Anderson, Delta's chief executive officer, 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."
Delta and Virgin now operate 31 round-trip flights between the United Kingdom and North America, and on these and other joint-venture flights, the airlines will share all costs and revenues.
"This is an exciting day in Virgin Atlantic history. It signals the
start of a new era of expansion, financial growth, and many opportunities
for our customers and our business. I truly look forward to the
possibilities our partnership with Delta will offer," stated Richard Branson, who will remain the head of Virgin.
In a separate press release, Virgin Atlantic announced it will launch a domestic program in April, which will include up to 24 flights within the United Kingdom each day. The primary focus, however, will be flights to and from Scotland. In doing so, the previously long-haul-only carrier will take up to nine of the coveted slots at London Heathrow recently vacated by British Airways.
This is just one of many airline developments currently brewing. Recently, the Allied Pilots Association, which represents pilots working for American Airlines, approved an agreement that was seen as the last major hurdle to American Airlines' restructuring plan. The agreement would pave the way for a merger with United Airlines, a development that has been rumored for months. Details of what a combined United-American would look like have recently emerged from unnamed sources, but representatives from American can't comment because of a non-disclosure agreement.
It has also been reported recently that the Luxembourg government is close to buying a 35-percent stake in the all-cargo carrier Cargolux, with the intention of selling it to interested parties. Qatar bought 35 percent of the carrier in June 2011, soon expanding its holdings, and had been seeking a buyer for its share of the carrier since November. - Jon Ross