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Delta and Virgin Atlantic to Form Strategic Alliance

Travel News Asia Latest Travel News Podcasts Videos Thursday, 13 December 2012
 

Delta Air Lines and Virgin Atlantic Airways have reached an agreement for a new joint venture that will create an expanded trans-Atlantic network.

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

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

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.

- A combined trans-Atlantic network between the United Kingdom and North America with 31 peak-day round-trip flights.

- 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.

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 transaction also will be reviewed by the U.S. Department of Justice and the European Unions competition regulator and other relevant authorities. The share purchase and the joint venture are expected to be implemented by the end of 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, said Delta CEO Richard Anderson. 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.

Steve Ridgway, Virgin Atlantic Chief Executive, added, 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. The trans-Atlantic market is Virgin Atlantics heartland - its where we started. By aligning with Delta we can continue to grow our North American network and offer greatly enhanced connectivity across the USA.

Delta and Virgin Atlantic customers will be able to earn and redeem miles across Deltas SkyMiles and Virgin Atlantics FlyingClub frequent flyer programs. Premium customers also will have reciprocal access to the Delta Sky Club and Virgin Atlantic Clubhouse airport lounges.

The two carriers will operate a total of 31 peak-day round-trip flights between the U.K. and North America, 23 of which operate at London-Heathrow.

See other recent news regarding: Travel News Asia, Delta, Virgin Atlantic, London, Heathrow

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