Delta and Virgin Atlantic to Team Up with JV

New York JFK Airport - on-time

New York JFK Airport – On-Time

Delta Air Lines and Virgin Atlantic agree to trans-Atlantic Joint-Venture

United States based Delta Air Lines and British based Virgin Atlantic reached an agreement for a new joint venture that will create an expanded trans-Atlantic network and enhance competition between the U.K. and North America.

Pending anti-trust approval, Delta will invest $360 million in Virgin Atlantic, acquiring a 49 percent stake currently held by Singapore Airlines. Sir Richard Brandson and Virgin Group will retain the majority 51% stake and Virgin Atlantic will keep its brand and operating certificate.

Highlights of the Agreement between Delta and Virgin Atlantic

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 trans-Atlantic network between the United Kingdom and North America with 31 peak-day round-trip flights;

Enhanced benefits for customers including cooperation on services between New York and London, with a combined total of nine daily round-trip flights from London-Heathrow (LHR) to John F. Kennedy International Airport (JFK) and Newark Liberty International Airport (EWR);

Reciprocal frequent flyer benefits;

Shared access to Delta Sky Club and Virgin Atlantic Clubhouse airport lounges for Business Class and Elite passengers.

Joint Venture Anti-Trust Immunity

Both Delta and Virgin Atlantic will file an application with the US Department of Transportation for antitrust immunity, allowing a closer relationship and coordination of schedules and operations. The transaction will also be reviewed by the US Department of Justice and the European Union’s competition regulator, as well as other authorities with an interest in the Joint Venture.

Delta CEO Richard Anderson, said, “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.” Anderson continued, “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 U.K., and continue building a better airline for our customers, employees and shareholders.”

Virgin Atlantic Chief Executive, Steve Ridgway, said, “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.” Ridgway added, “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, with expedited approval being granted by the end of 2013. The trans-Atlantic market is Virgin Atlantic’s heartland – it’s where we started. By aligning with Delta we can continue to grow our North American network and offer greatly enhanced connectivity across the USA.”

Sir Richard Branson, the Virgin Atlantic’s brainchild, founder, and President, said, “This is an exciting day in Virgin Atlantic history. It signals the start of a new era of expansion, financial growth and many opportunities for our customers and our business. I truly look forward to the possibilities our partnership with Delta will offer. We have always been known for our innovation and service and have punched above our weight for 28 years. That is why our customers love us so much. We will retain that independent spirit but move forward in a strengthened partnership with Delta.”

Reciprocal Frequent Flyer Program Agreements

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

Heathrow Expansion and Slot Constraints

The partnership allows both carriers to offer a greatly expanded network at Heathrow and to overcome slot constraints, which have limited the growth and competitive capability of both airlines. The two carriers will operate a total of 31 peak-day round-trip flights between the U.K. and North America, 23 of which operate at London-Heathrow (LHR). The enlarged network will benefit customers of both carriers by providing greater access to a broader network, improved connectivity and convenient booking options.

Delta and Virgin Atlantic Product Investments

As part of a $3 billion investment in enhanced global products, services and airport facilities, all of Delta’s flights between the U.S. and London-Heathrow feature full flat-bed seats offering direct aisle access in the BusinessElite cabin. These flights also offer Delta’s popular Economy Comfort seating in the forward section of the economy cabin. Economy Comfort offers four additional inches of legroom and 50 percent more recline compared to standard economy seats. All cabins offer in-seat audio and video on demand with a broad range of in-flight entertainment options. Delta also will begin introducing in-flight WiFi service on international flights beginning in 2013.

Virgin Atlantic has recently completed a £150m upgrade program. A new Upper Class cabin has been introduced across its Airbus A330 aircraft, which features the longest fully flat bed in the sky. This is complemented by a redesigned onboard bar and new Clubhouses at both JFK and Newark airports. The airline’s Boeing 747 leisure fleet has been completely refitted and features onboard connectivity and VERA Touch – Virgin Atlantic’s award-winning touch screen in-flight entertainment system – offering passengers hours of entertainment at their fingertips.

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