Delta buys stake in Virgin Atlantic for $360 million
London, United Kingdom (4E) – Delta Air Lines Inc. offers $360 million for a 49 per cent stake in Virgin Atlantic Airways Ltd., a deal seen that will expand the presence of the U.S. carrier at London’s Heathrow Airport.
The joint venture between Virgin and Delta would boost competition in the air traffic between North America and the UK, providing better deals for travellers on those routes, according to a statement. Between the two companies, they will jointly operate 31 daily U.S.-UK round-trip flights.
Delta, the second largest U.S. carrier in terms of traffic, purchased the stake from Singapore Airlines Ltd. Virgin Group. Under the deal, founder Richard Branson will maintain a 51 per cent majority stake with the airline and the brand Virgin Atlantic Airways will be retained as well as its operating certificate.
In 1999, Singapore Airlines paid $962m for its stake in Virgin, although the airline did not pursue integration with the British carrier.
News of the deal came after the latest Virgin Atlantic-British Airways (BA) spat with Branson offering £1m to BA staff if the Virgin goes out of business within five years as suggested by Willie Walsh, head of the BA’s parent company.
BA controls almost half of the slots at London’s Heathrow airport and is the major player on flights to U.S. destinations.