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Delta and Virgin Atlantic to Form Strategic Alliance

Delta and Virgin Atlantic to Form Strategic Alliance

Delta Air Lines and Virgin Atlantic Airways have reached an agreement for a new joint venture that will create an expanded transatlantic network and enhance competition between the UK and North America, offering greater benefits for customers travelling on those routes.

As part of this joint venture agreement, Delta will invest US$360 million in Virgin Atlantic, acquiring a 49% stake currently held by Singapore Airlines. Virgin Group and Sir Richard Branson will retain the majority 51% stake and Virgin Atlantic Airways will retain its brand and operating certificate.

Delta

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 transatlantic network between the UK and North America with 31 peak-day round-trip flights.

·         Enhanced benefits for customers including co-operation 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.

Virgin Atlantic A330

  • 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 US Department of Transportation for antitrust immunity, which will allow a closer relationship and co-ordination on schedules and operations. The transaction also will be reviewed by the US Department of Justice and the EU’s 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 UK, particularly on the New York – London route, which is the largest airline route between the USA and Europe,” said Delta Chief Executive 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 UK, and continue building a better airline for our customers, employees and shareholders.”

Steve Ridgway, Virgin Atlantic Chief Executive, added: “Consumers will reap the rewards of this partnership between two great airline brands on services from the UK to the USA, Canada and Mexico through a shared ethos in the highest standards of customer service. This joint venture will deliver much more effective competition at Heathrow.

  • Delta and Virgin Atlantic customers will be able to earn and redeem miles across Delta’s SkyMiles and Virgin Atlantic’s FlyingClub frequent flyer programmes. Premium customers will also have reciprocal access to the Delta Sky Club and Virgin Atlantic Clubhouse airport lounges. Full details will be announced as services become available.

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Michael Flood is the Editor of Ireland's leading travel industry publication, Irish Travel Trade News. With more than 35 years experience, he has accumulated an in-depth knowledge of the airline industry and the travel and tourism world.

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