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December 11, 2012

Delta Gains Access to Virgin’s Precious Slots

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By: NYCA Admin
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Lady Penelope rides the back of a Virgin Atlantic 747-400 (G-VFAB). (Photo by Ronnie McDonald via Flickr, CC-BY)
Lady Penelope rides the back of a Virgin Atlantic 747-400 (G-VFAB). (Photo by Ronnie McDonald via Flickr, CC-BY)
Delta Air Lines and Virgin Atlantic Airways will join forces to cross the Atlantic.

The pair will form a joint venture to take on the juggernaut formed by American Airlines, British Airways and Iberia when they formed a similar transatlantic pact in 2010. The cornerstone of the deal will be Delta’s purchase of a 49 percent stake of Virgin Atlantic for $360 million, a position currently held by Singapore Airlines. Delta and Virgin will evenly split all costs and revenues.

“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 in a statement.

In other words, Delta gains access to Virgin’s precious slots at London Heathrow Airport. While Delta is the largest US carrier, the American/British Airways tie-up dominates the New York-London route.

The airlines expect approval for the deal by the end of 2013.

For flyers, this will have a few benefits:

  • The combined Delta/Virgin operation will fly 31 peak-day round-trips between the US and UK, with 9 of those linking New York (JFK and EWR) with London Heathrow
  • Reciprocal frequent flyer benefits between the Delta SkyMiles and Virgin Atlantic Flying Club programs
  • Reciprocal access to Delta Sky Clubs and Virgin Atlantic Clubhouses

Following several days of industry speculation on the possibility of such a deal, British Airways boss Willie Walsh suggested that Delta was only interested in Virgin’s Heathrow access and would likely eliminate the Virgin Atlantic brand. Virgin founder Sir Richard Branson responded with a £1 million bet that Virgin would live on, to which Walsh said he would rather bet Branson a knee to the groin.

Moments after the deal was announced, Branson accepted Walsh’s proposal, tweeting, “Happy to accept Willie Walsh’s bet: loser to receive a knee in the groin – at winning airline’s HQ.”

We’ll hear more details at a press conference in New York this morning.

Developing…


  • ArtLab

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