Virgin Atlantic Airways stake bought by Delta for $360M
| London
U.S. carrier聽Delta聽Air Lines聽said it had bought Singapore Airlines' 49 percent stake in Britain'蝉听Virgin Atlantic Airways for $360 million and agreed a transatlantic joint venture with Virgin.
Virgin and聽Delta聽on Tuesday said under the joint venture they would share costs and revenues on routes between Britain and聽North America.
The pair plan to cooperate on services between New York and聽London, with a total of nine daily round-trip flights from聽London聽Heathrow 迟辞听John F. Kennedy International Airport听补苍诲听Newark Liberty International Airport.
"Our new partnership with聽Virgin Atlantic聽will strengthen both airlines and provide a more effective competitor between聽North America聽and the U.K., particularly on the New York-London聽route, which is the largest airline route between the U.S. and聽Europe," said聽Delta聽Chief Executive Richard Anderson.
The airlines said they would file an application with the聽U.S. Department of Transportation聽for competition clearance and that the deal would need to be reviewed by the U.S. Department of Justice and the聽European Union's competition regulator.
The deal will enable聽Delta聽to expand at聽London's Heathrow airport, a lucrative hub for corporate passengers where landing slots are generally hard to acquire. Virgin is the second-largest carrier at Heathrow after聽IAG's British Airways.
Heathrow,聽Europe's busiest airport, is operating at close to full capacity after Britain's coalition government blocked its expansion in 2010.
British entrepreneur聽Richard Branson聽said he would retain his 51 percent stake in聽Virgin Atlantic聽and maintain the brand of the airline he founded in 1984.
"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," said Branson.
The two carriers will operate a total of 31 peak-day round-trip flights between the U.K. and聽North America, 23 of which operate at聽London聽Heathrow.
The partnership will be similar to that operated by American Airlines and聽IAG's British Airways (BA) since 2010 on transatlantic and some European routes.
Singapore Airlines bought 49 percent of聽Virgin Atlantic聽for $965 million in 1999, but has been open to selling its stake since at least mid-2011 when a price of $500-$600 million was mooted in markets.
Singapore Airlines has been refocusing on its key markets where it is under pressure from budget airlines, launching its own budget carrier,聽Scoot, to ply Asian middle-distance routes and bolstering its Asian regional carrier,聽SilkAir.
