Virgin Atlantic News Update: Delta Air Lines Buy Stake in Virgin Atlantic
Virgin Atlantic News Update: Richard Branson’s air line company confirm sale of 49% stake to Delta Air Lines to increase travel points to and from America.
In order to offer their customers a wider range of destinations in the United States, Virgin Atlantic and Delta Air Lines have announced a code-share agreement.
“Delta is paying $360m for the Virgin stake it is buying off Singapore Airlines, after the deal – first proposed in December – last week secured regulatory clearance in Washington and Brussels.
The two carriers are now awaiting separate approval from the US Department of Transportation to start a joint venture coordinating their pricing and schedules on transatlantic routes, in a move that will enable them to provide stronger competition for a similar partnership between British Airways and American Airlines.
Delta’s tie-up with Virgin, where Sir Richard retains a 51 per cent stake, should bolster the UK carrier on its core transatlantic routes.
Virgin’s loss before tax and exceptional items widened from £98.6m in 2011-12 to £128.4m in 2012-13, which was blamed on the weak economy and last year’s Olympic Games, and it is seeking to return to profit in 2015.
Craig Kreeger, Virgin’s chief executive since January, said the partnership with Delta would enable the UK airline to offer its customers a much broader network of destinations in North America. ‘It is a big part of our recovery plan,’ he added.
Delta, the second-largest US carrier by revenue, has invested in Virgin partly because of the UK carrier’s relatively strong presence at London’s capacity-constrained Heathrow airport – a key gateway from the US into Europe.
Ed Bastian, Delta’s president, expressed confidence the planned joint venture with Virgin would secure clearance from the US Department of Transportation without the need for concessions.
‘We are confident given the opportunity to bring more choice and greater competition into a market already served by a much larger joint venture – namely the American Airlines and British Airways alliance,’ he said.
The code-share agreement between Delta and Virgin, which takes effect next month, is a business arrangement between the two airlines that means they jointly market some of their flights.
One of the two airlines will operate a particular flight, but both will sell tickets for this route.
Virgin will place its code on Delta routes, in a move that means the number of US destinations that the UK carrier can offer its customers will increase from 10 to 55.
Delta, meanwhile, will put its code on Virgin routes, so that the Atlanta-based carrier’s customers will be able to fly from the US to Heathrow on 23 different daily flights, compared with nine currently.”
This deal should mean exceptional service for passengers travelling between the US and Europe which should in turn rival other companies such as BA who currently dominate those routes. If you have any more questions for Virgin Atlantic, contact their customer services department and speak with a member of their team.
This article originally published on The Financial Times website.
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