Deal frees SIA to focus on markets closer to home
Delta Air Lines has bought Singapore Airlines’ 49% stake in Virgin Atlantic for $360 million. Singapore Airlines paid around double that price for its stake 12 years ago. However, the deal frees SIA to focus on markets closer to home. In October, it bought a 10% stake in Virgin Australia for $108.5 million, showing a renewed focus on the Far East.
Under the Delta-Virgin deal a new trans-Atlantic joint venture will be created. Under this combined trans-Atlantic network between the UK and North America there will be 31 peak-day round-trip flights. Virgin Group and Sir Richard Branson retain their majority 51% stake and Virgin Atlantic Airways will keep its brand and operating certificate. The airlines will share the costs and revenues from all joint-venture flights.
Delta and Virgin Atlantic promise “enhanced benefits” for passengers on services between New York and London, with a combined total of nine daily round-trip flights from London Heathrow to John F Kennedy International and Newark Liberty International. There will also be reciprocal frequent-flyer benefits and shared access to lounges.
“Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the UK, particularly on the New York-London route, which is the largest airline route between the US and Europe,” said Delta’s chief executive, Richard Anderson.
TTG Digital / The Guardian