Delta Air Lines to buy 49% of Virgin Atlantic

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Delta Air Lines to buy 49% of Virgin Atlantic

Unread post by bimjim » Wed Dec 12, 2012 ... rm-jv-1211

Delta Air Lines to buy 49% of Virgin Atlantic; carriers to form JV
Aaron Karp
December 11, 2012

Delta Air Lines will spend $360 million to acquire Singapore Airlines’ 49% stake in Virgin Atlantic Airways. As part of the deal, Delta and Virgin Atlantic will launch a transatlantic joint venture (JV).

“Virgin Group and [chairman] Sir Richard Branson will retain the majority 51% stake and Virgin Atlantic Airways will retain its brand and operating certificate,” Delta and Virgin Atlantic said in a joint statement.

The JV will operate on a “metal neutral basis,” the carriers said, adding that both airlines will share “the costs and revenues from all joint venture flights.” The statement continued, “The airlines will file an application with the US 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 US Department of Justice and the European Union's competition regulator and other relevant authorities.”

The airlines expect both the share purchase and JV to be in place by the end of next year.

“Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the UK, particularly on the New York-London route, which is the largest airline route between the US and Europe,” Delta CEO Richard Anderson said.

Virgin Atlantic CEO Steve Ridgway stated, “This joint venture will deliver much more effective competition at [London] Heathrow. 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.”

Branson said the agreement with Delta “signals the start of a new era of expansion, financial growth and many opportunities for our customers and our business.”

The two carriers said they will operate “a total of 31 peak-day round-trip flights between the UK and North America, 23 of which operate at London Heathrow. The enlarged network will benefit customers of both carriers by providing greater access to a broader network, improved connectivity and convenient booking options.”

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