Delta Air Lines and Virgin Atlantic Airways formally filed an antitrust immunity application with the US Dept. of Transportation (DOT) for their joint venture (JV).
Delta late last year announced it would spend $360 million to acquire Singapore Airlines’ 49% stake in Virgin Atlantic Airways. As part of the deal, Delta and Virgin Atlantic will launch a transatlantic JV operating on a metal neutral basis in which the airlines will share costs and revenue from all JV flights. The JV plans to operate 31 peak-day round-trip flights between the UK and North America, 23 of which will operate at London Heathrow. Delta estimates the JV will operate about 24% of the passenger seats between Heathrow and the US.
In the application to DOT, Delta and Virgin Atlantic noted that “nearly 60% of the slots at London Heathrow Airport are controlled by the American Airlines/British Airways joint venture which, as a result, dominates air travel between the US and the UK, including the New York-London market, which is the most important business market in the world.” The Delta/Virgin JV “will offer significant competition in the market,” the carriers said.
Virgin Atlantic CEO Craig Kreeger said in a statement, “We are confident that the DOT will recognize this consumer benefit.”
Delta said that if the JV gains antitrust immunity, it plans to begin new service between Seattle and London Heathrow. The airlines have said they expect both the share purchase and JV to be in place by the end of this year.