Delta-Virgin tie-up cleared for take-off

The two airlines says they are joining forces so they can compete with the likes of BA and offer more destinations to passengers. Guam, anyone?

by Emma Haslett
Last Updated: 25 Jun 2013
Gosh. Doesn’t time fly? (Literally, in Richard Branson’s case). It seems like five minutes ago MT’s favourite hirsute honcho was spitting blood about British Airways’ tie-up with BA and American Airways when they formed the International Airlines Group back in 2010. Now, he’s having a go at his own version of the tie-up.

US airline Delta confirmed this afternoon that it had finalised the purchase of a 49% stake in Virgin Atlantic, which will allow the airline to offer UK passengers a wider choice of destinations, particularly in the US. Yes: now we can all jet off to Eugene, Oregon or Guam whenever the fancy takes us.

The tie-up isn’t unusual for the airline industry: consolidation is becoming the done thing in a sector where losses are beginning to mount. Even Branson’s once-untouchable Virgin Atlantic made a loss before tax of £128.4m in 2012, up from £98.6m in 2011.

The joint venture is supposed to go ahead next month – although the pair are still waiting for approval from the US Department of Transportation before they can begin properly co-ordinating pricing and schedules on transatlantic routes. They don’t expect it to take long, though.

It looks like Branson's attitudes are already rubbing off on Delta president Ed Bastian, who couldn’t resist a sly dig at International Airlines Group, the company formed by the tie-up between BA, Iberia and AA.

‘We are confident given the opportunity to bring more choice and greater competition already served by a much larger joint venture – namely the American Airlines and British Airways alliance,’ he said. Now now, children…

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