Virgin Group boss Richard Branson insists that Virgin Atlantic’s brand will remain intact well into the future following Delta Air Lines’ planned purchase of Singapore Airlines’ 49-percent stake in the UK carrier. “First of all, ignore the press speculation, the British Airways speculation,” said Branson via a video feed from his Caribbean retreat on Necker Island during last week’s announcement. “I’m not going anywhere.”
Branson’s promise came in reaction to assertions by Willie Walsh, head of British Airways parent International Airlines Group, that the $360 million deal would eventually spell the end of the Virgin Atlantic name.
For its part, Delta stressed its interest in overcoming slot restraints at London Heathrow Airport as one of the primary motivations for the deal. Once consummated following antitrust review, it would result in the two carriers flying a total of 31 peak-day round trips between the UK and North America, 23 of which operate at London Heathrow. Nine of the Heathrow flights would connect New York JFK and Newark Liberty International Airports. The deal would give the partners between 24 and 25 percent of the transatlantic market, Delta CEO Richard Anderson noted during a December 11 press conference in New York.
The agreement calls for the formation of a fully integrated joint venture that would operate on a “metal neutral basis,” leaving both airlines sharing the costs and revenues from all joint-venture flights. Passengers would benefit from reciprocal frequent flier programs and shared access to each of the airlines’ airport lounges.
The airlines said they plan to file an application with the U.S. Department of Transportation for antitrust immunity. The transaction must also undergo review by the U.S. Department of Justice and the European Union’s competition regulator.
Appearing with Anderson in New York last Tuesday, Virgin Atlantic CFO Julie Southern confirmed her airline’s interest in joining the SkyTeam alliance, to which Delta already belongs. “We’re engaged with that work and we think we’ll reach a conclusion on that over the next few months,” said Southern. Anderson added that its Air France/KLM joint venture partner has expressed “strong support” for the Virgin deal.
Separately last week, Walsh’s IAG gained a reprieve from a threatened strike among cabin staff and ground crew at its Spanish subsidiary, Iberia, in protest of planned job cuts. Unions representing the workers called off the strike, scheduled to take place on December 14 and from December 17 to 21, to avoid disrupting holiday travel plans, according to union leaders.
