Delta Air Lines (NYSE:DAL) has reached an agreement with Singapore Airlines to acquire its 49 percent stake in Virgin Atlantic Airways, unlocking valuable slots at London’s Heathrow airport for the U.S. carrier and initiating a lucrative trans-Atlantic joint venture.
The statement released by Delta notes that “as part of this joint venture agreement, Delta will invest $360 million in Virgin Atlantic, acquiring a 49 percent stake currently held by Singapore Airlines.”
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The two airlines plan to enter a “metal neutral” arrangement where they share the costs and revenue from all joint-venture flights. The combined venture will offer up to 31 round-trip flights between North America and the United Kingdom on a peak day.
There will be about nine daily round-trip flights from Heathrow to JFK International and Newark Liberty International Airport. Passengers will be able to claim reciprocal frequent flyer miles and have shared access to sky clubs.
“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,” said Delta CEO Richard Anderson in the statement.
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Delta’s statement reads: “Virgin Group and Sir Richard Branson will retain the majority 51 percent stake and Virgin Atlantic Airways will retain its brand and operating certificate.”
There was some speculation before the deal was officially announced that Delta would devour the Virgin brand in the process…