Delta Air Lines and Virgin Atlantic Airways plan to roll out codeshare and frequent flier partnerships ahead of a metal neutral joint venture alliance across the north Atlantic, as they seek anti-trust immunity.
Julie Southern, chief commercial officer of Virgin Atlantic, says that the carriers have a "long regulatory process ahead" as they seek immunity but intend to increase cooperation within the existing regulatory limits ahead of approval, during a press conference in New York today.
Atlanta-based Delta announced that it would acquire a 49% stake in UK-based Virgin Atlantic from Singapore Airlines for $360 million earlier today. The two airlines intend to form an immunised joint venture between the USA and UK following the deal and anticipate approval from EU and US regulators by the end of 2013.
"We need to get through the steps of the regulatory process first and attain anti-trust approval before we make those announcements," says Richard Anderson, chief executive of Delta, on any route or schedule changes as a result of the partnership.
He says that both airlines anticipate little difficulty receiving anti-trust immunity in the USA-UK market, as a Delta-Virgin Atlantic partnership will have a smaller market share than the existing joint venture between American Airlines and British Airways.
SkyTeam alliance membership is a possibility for Virgin Atlantic. Southern says that the airline will evaluate membership and make a decision in the next "few months".
"We will look at an alliance membership if it's the right thing to do in the future," she says. "We see this as a first step."
Anderson says that its existing joint venture partners Air France-KLM and Alitalia are very "supportive" of the deal that he says will be very "positive and accretive" for them. However, he specifically indicates that Delta plans to have two immunised partnerships over the north Atlantic.
Southern adds that Virgin Atlantic will look at whether it can bring additional benefits to the existing joint venture by flying to Amsterdam, Paris and Rome in the future.
|Delta and Virgin Atlantic combined UK-US routes, December 2012 Innovata FlightMaps Analytics|
Connectivity will initially be an issue at London Heathrow. Delta will continue to operate from terminal 4 and Virgin Atlantic from terminal 3 due to space constraints at the UK airport, which is undergoing renovations. Transiting passengers must take a bus between the terminals.
"We hope to co-locate together at some point in time at terminal 3," says Southern, indicating that a move by Delta could be years away. She says that Virgin Atlantic has made significant investments in the terminal that it hopes to share with Delta customers in the future.
At New York's John F. Kennedy airport, both Delta and Virgin Atlantic operate from terminal 4.
The Virgin Atlantic brand will continue to fly under the new partnership, despite speculation to the contrary. All of the executives at the event emphasised the strength of the "iconic" Virgin brand.
"That actually gets my blood to boil a little," says Anderson in response to the speculation. "Virgin Atlantic is an iconic brand. The whole purpose is to join the brand and join the networks together."
"We're not going anywhere," says Richard Branson, president of Virgin Atlantic, at the event via a video conference.