Virgin Atlantic and Delta are to form a new transatlantic joint venture after the US airline agreed to buy a 49 per cent stake in Virgin for $360 million.
As part of the deal, Virgin Atlantic will retain its brand and operating certificate while Sir Richard Branson’s Virgin Group will continue to be the majority shareholder with a 51 per cent stake.
Delta is buying the minority shareholding in Virgin from Singapore Airlines and the move will allow the two airlines to challenge the British Airways-American Airlines joint venture across the Atlantic.
The Delta-Virgin agreement includes:
- 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 Heathrow to John F. Kennedy International Airport and Newark Liberty International Airport
- Reciprocal frequent flyer benefits
- Shared access to Delta Sky Club and Virgin Atlantic Clubhouse airport lounges for elite passengers
The planned joint venture will have to secure clearance from competition watchdogs at the US Department of Justice and the European Union but Delta and Virgin said the purchase and joint venture were likely to be "implemented by the end of 2013".