Delta buys 49 percent stake in Virgin Atlantic

BIV

I'm Biv Dick Black, the Over Poster.
Apr 22, 2002
79,009
27,590
898
Seattle
#1
Delta buys 49 percent stake in Virgin Atlantic
Delta buys 49 percent of Virgin Atlantic for $360M; joint venture to boost Heathrow presence


Delta Air Lines said it will buy almost half of Virgin Atlantic for $360 million as it seeks a bigger share of the lucrative New York-to-London travel market.

Delta plans to form a joint venture with Virgin Atlantic, where the two airlines would share money from the flights operated under the partnership. In order to coordinate the schedules of the two airlines, they'll need antitrust approval from U.S. and European regulators.

Landing rights at London's Heathrow Airport are limited. So buying part of Virgin Atlantic is a way for Delta to get a bigger piece of the travel market between Heathrow and the U.S. Currently, Delta has fewer flights from the New York area to Heathrow than either American or United, its main U.S. competitors.

If the plan is approved, Delta and Virgin Atlantic would continue to fly between the U.S. and the U.K., as they do now. However, they would market the flights together and share the costs and profits.

Delta said it expects to have 31 round-trip flights between the U.K. and North America on the busiest days, including nine round-trips a day between Heathrow and John F. Kennedy International Airport in New York and Newark Liberty International Airport in New Jersey.

Heathrow is dominated by British Airways, which works closely with American Airlines. They have a total of 14 flights a day in each direction between JFK and Newark and Heathrow.

Delta is seeking something similar with Virgin Atlantic.

"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," Delta CEO Richard Anderson said in a prepared statement.

Delta is aiming to have the joint operation running by the end of 2013.

Sir Richard Branson will still own more than half of Virgin Atlantic, which will continue to fly as a separate airline under its own name. In 2000, Branson sold a stake to Singapore Airlines for 600.3 million pounds, or about $960 million at the time. That's the share that Delta intends to buy.

Virgin Atlantic has struggled with losses and said in 2010 that it might be interested in some kind of tie-up with another airline. British media reports at that time said that Delta was interested.

Shares of Atlanta-based Delta Air Lines Inc. rose 16 cents to $10.30 in premarket trading.
http://news.yahoo.com/delta-buys-49...RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
 

MayrMeninoCrash

Liberal Psycopath
Dec 9, 2004
24,554
8,726
693
Loveland, CO
#3
Virgin Atlantic WAS a good airline. I'm sure this maneuver will turn them into fee-grubbing cattle cars.
 

jules

uppity taxpayer
Jul 24, 2005
3,695
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south jersey
#4
Virgin Atlantic WAS a good airline. I'm sure this maneuver will turn them into fee-grubbing cattle cars.
exactly the first thought in my head
i flew virgin phila to LA a few times and was blown away how great it was compared to the others
 

Bluestreak

This space intentionally left blank.
Sep 27, 2007
4,557
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Mawl-din, MA
#5
Soon enough, our most comfortable travel method to Europe will be steamship.
 
Dec 8, 2004
49,314
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Maine
#6
Soon enough, our most comfortable travel method to Europe will be steamship.
Chick has been to Europe a few times on various airlines... and she loves Lufthansa... mind you she did get bumped to first class so that prob helps.