Delta buys 49% of Virgin Atlantic (official)
Dec 2, 2012, 8:17 pm
#16
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Dec 2, 2012, 8:51 pm
#18
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IIRC SQ owns 49% and presumably this is what DL would buy.
Dec 2, 2012, 9:14 pm
#19
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Wonder if this is mostly so they can get some control over all that VA availability to Australia? I can picture the first board meeting now... Agenda item #1 is a nifty new award calendar for VS.
Dec 2, 2012, 9:14 pm
#20
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Does VS really do any intra-Europe flying? I was under the impression most all of the VS network involved long haul flights of which most DL already serves. I suppose DL is wanting VS to feed the Delta domestic network?
Dec 2, 2012, 9:18 pm
#21
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Ok that would never happen. The JV makes flights metal neutral but also equally divides up the flying between the carriers. So no chance VS would get all the LHR-USA flights....sorry. However, I would bet that DL would be quick to drop BOS-LHR and possibly some others if this deal goes through. This would really help with the New York expansion too, DL/VS would be a real player vs AA/BA in the NYC-LHR market
Dec 2, 2012, 9:55 pm
#22
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Dec 2, 2012, 10:04 pm
#23
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Hmm, looking at the route map it doesn't look like VS brings much to the table. I wonder if passengers flying VS to Havana, Cuba will be able to earn Skymiles? 
Dec 2, 2012, 10:16 pm
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Dec 2, 2012, 10:25 pm
#25
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Delta has only 767ER on the UK route and limited frequency and they obviously felt the UK market was ripe for growth and Delta and Virgin Atlantic are very complementary.
And Singapore can free up the cash to fund its own route expansion rather than relying on Virgin Atlantic. I see the real reason was to get permission for UK routes but none was given.
So it is a net benefit for Singapore who can do better on their invested capital in Virgin Atlantic and a net benefit for Delta airlines who gains a substantial UK partner.
Deal makes perfect sense and is a win for all parties.
http://www.telegraph.co.uk/finance/n...s-Branson.html
And the answer is obviously SkyTeam and I am assuming this deal will go through. It is a win-win.
Last edited by adamj023; Dec 2, 2012 at 10:32 pm
Dec 2, 2012, 11:15 pm
#27
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What would buying a stake in Virgin Atlantic have to do with Virgin Australia availability? They're separate companies, and not even very close partners; VA's main partner to Europe is Etihad.SQ does have a (recently-increased) equity share in Virgin Australia as well, but for the Australia-Asia market, so I doubt that would be affected by SQ backing out of VS.
I would think this is all about the LHR O/D market. The AF/KLM/Alitalia joint venture covers smaller destinations in Europe that require a connection just fine, but connecting in CDG or AMS to get to LHR isn't exactly competitive.
Dec 3, 2012, 12:01 am
#28
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VS announced a couple of weeks ago that they're starting routes to Scotland. BA had to divest some short-haul slots when they acquired BMI from LH.
http://www.bbc.co.uk/news/uk-scotlan...iness-20384801
http://www.bbc.co.uk/news/uk-scotlan...iness-20384801
Dec 3, 2012, 12:17 am
#30
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What would buying a stake in Virgin Atlantic have to do with Virgin Australia availability? They're separate companies, and not even very close partners; VA's main partner to Europe is Etihad.SQ does have a (recently-increased) equity share in Virgin Australia as well, but for the Australia-Asia market, so I doubt that would be affected by SQ backing out of VS.
Virgin Atlantic is starting its first intra-Europe services in the spring, three daily LHR-MAN flights. Not exactly a giant feed.
I would think this is all about the LHR O/D market. The AF/KLM/Alitalia joint venture covers smaller destinations in Europe that require a connection just fine, but connecting in CDG or AMS to get to LHR isn't exactly competitive.
I will say that the UK market is super competitive and by an alliance with Delta, Virgin will be getting more connection traffic which it needed to sustain its business model.
Previously Delta had very limited flight frequencies with 767ER. Now Delta gets access to Virgin Atlantic.