HERMAN DE WULF / BRUSSELS
Negotiations with Belgian financial group Airholding - owner of Delta Air Transport - are due to be completed this quarter
Brussels-based low-cost airline Virgin Express has begun merger talks with the new Belgian financial group Airholding, which bought budget commuter airline Delta Air Transport (DAT) from the Sabena receiver at the end of last year for the token sum of €1 (90¢).
Negotiations are expected to be completed this quarter, but any merger of DAT and Virgin Express would be subject to approval by the European Commission and Virgin Express shareholders.
It is believed the proposed merged airline would be rebranded and Brussels-based, with services aimed at cost-conscious regional business customers. Few details have emerged, as both parties have signed a confidentiality agreement.
The two airlines have signed a commercial contract covering the period from 6 January 2002 to 28 March 2003. The deal extends an earlier DAT/Sabena-Virgin Express codeshare agreement on routes to Barcelona, London and Rome that was interrupted when DAT began underselling Virgin Express, using c124 million refundable credit provided by the Belgian government.
Sabena bought capacity on Virgin Express flights to Barcelona, London Heathrow and Rome, an arrangement that represented 40% of Virgin Express's turnover. Under the new agreement both airlines will again sell seats on each other's flights.
Belgium's other carrier, newly formed VG Airlines, will begin scheduled flights from Brussels to New York on 1 March, using three ex-Sabena Airbus A330-200s leased from International Lease Finance.
VG Airlines chairman Freddy van Gaever says if DAT starts flights to New York, VG will serve Los Angeles and San Francisco instead to avoid competition with DAT. Van Gaever says a return ticket to New York will cost around c500.
VG's maintenance will probably be outsourced to SR Technics or Lufthansa Technik, as Sabena's maintenance arm Sabena Technics is facing bankruptcy and cannot afford to put down a deposit on the contract.
Source: Flight International
