SIA agrees sale of Virgin Atlantic shares
Delta Airlines has struck a deal to acquire a 49% stake in Virgin Atlantic from Singapore Airlines (SIA).
As part of this joint venture agreement, Delta will invest US$360 million in Virgin Atlantic to acquire the SIA share, while Virgin Group and Sir Richard Branson will retain the majority 51% stake, and the airline will retain its brand and operating certificate. Under the agreement the partners will share the costs and revenues from all joint venture operations, and deliver enhanced services connecting UK to North America.
The partnership allows both carriers to offer a greatly expanded network at Heathrow and to overcome slot constraints, which have limited the growth and competitive capability of both airlines. The two carriers will operate a total of 31 peak-day round-trip flights between the UK and North America, 23 of which operate at London-Heathrow.
The airlines will file an application with the US Department of Transportation for antitrust immunity, which will allow a closer relationship and coordination on schedules and operations. The transaction also will be reviewed by the US Department of Justice and the European Union’s competition regulator and other relevant authorities, with the share purchase and the joint venture expected to be implemented by the end of 2013.
“Both airlines are confident that the Department of Transportation will be as convinced as we are of the extensive consumer benefits arising from this joint venture, with expedited approval being granted by the end of 2013,” said Steve Ridgway, Virgin Atlantic Chief Executive.