Thursday, 13 December 2012

Delta Buys Virgin Stake To Boost London Access

Delta Air Lines agreed to buy a 49 percent stake in Virgin Atlantic, creating a joint venture that would expand Delta's access to London's Heathrow Airport and increase competition in thelucrative transatlantic market.
The partnership would let both carriers offer more flights at Heathrow, Europe's busiest airport, where landing-slot constraints have limited their growth. It also gives Delta the ability to attract corporate passengers as it competes with United and American airlines.
Delta and Virgin said their agreement would generate new revenue and leverage Virgin's strong luxury brand. The venture also will be "very positive and accretive for our long-term partners... KLM, Air France and Alitalia," Delta chief executive Richard Anderson said, referring to the European airlines with which Delta already has partnerships.
The deal had been two years in the making, and talks intensified over the summer, said Peter Norris, chairman of Virgin Atlantic Group and Virgin Group Holdings.
Richard Branson, Virgin's CEO, said the deal "signals a new era of expansion," adding that the companies "will cooperate on growing the number of places we fly."
The partnership also will provide "really effective competition" with the top-ranked alliance between British Airways and American Airlines, which has 60 percent of the market between the United States and London, he said. Branson dismissed speculation that he would cede control or leave the business.

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