Delta Airlines has announced it has agreed to acquire the 49% stake Singapore Airlines has in Virgin Atlantic Airlines. The majority owner of Virgin Atlantic is Richard Branson. Delta will be paying $360 million for the 40% share of the airline, with a goal of increasing their share in the trans-Atlantic market, which is very lucrative.
Virgin Atlantic is currently the biggest rival of British Airways for long haul flights from London’s Heathrow Airport and will start with Delta on a joint venture of 31 daily roundtrip flights between North America and the United Kingdom.
With the deal, Atlanta, Georgia based Delta will be able to get a bigger piece of the pie in the biggest market in air travel for premium passengers worldwide. Virgin founder Branson, will keep control of the company, but the go it alone theme that he has always carried will no longer be in effect. Branson found Virgin in the UK close to thirty years ago.
Singapore Air has been contemplating selling their share for some time and said the investment, which was made over ten years ago, did not live up to the expectations of the airline.
Delta will attempt with Virgin to receive antitrust immunity from federal and airline regulators. With the immunity, they would be able to quickly coordinate prices, schedules, revenues and share costs for the new 31-flight joint venture.
In the joint venture, nine daily flights will be involved. The flights will be from JFK International in New York and Newark Liberty International located in New Jersey to Heathrow.