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| Delta cleared to complete purchase of 49% stake in Virgin Atlantic | |
| (35 minutes later) | |
| Virgin and Delta have vowed to become a "formidable competitor" on UK-US routes after the American airline was cleared to complete its purchase of a 49% stake of Sir Richard Branson's Atlantic carrier. | Virgin and Delta have vowed to become a "formidable competitor" on UK-US routes after the American airline was cleared to complete its purchase of a 49% stake of Sir Richard Branson's Atlantic carrier. |
| The two companies announced a codesharing agreement on more than 100 routes as the start of a proposed joint venture that will, with competition clearance from US authorities, be fully realised in early 2014 and allow them to coordinate timetables to maximise profits. | The two companies announced a codesharing agreement on more than 100 routes as the start of a proposed joint venture that will, with competition clearance from US authorities, be fully realised in early 2014 and allow them to coordinate timetables to maximise profits. |
| The deal will see Delta gain the greater access it has long sought to London's Heathrow, while Virgin Atlantic will be able to funnel passengers directly on to Delta's vast US network. The tie-up and extra traffic on lucrative routes will bolster Virgin's finances after two years of heavy losses. | The deal will see Delta gain the greater access it has long sought to London's Heathrow, while Virgin Atlantic will be able to funnel passengers directly on to Delta's vast US network. The tie-up and extra traffic on lucrative routes will bolster Virgin's finances after two years of heavy losses. |
| Delta's president, Ed Bastian, said the deal was a game-changer when it came to competing on transatlantic routes. "Heathrow is a hugely important market and one where Delta has long wanted greater access. Our options were limited, so when the opportunity came along for a deal with Virgin we moved quickly. | Delta's president, Ed Bastian, said the deal was a game-changer when it came to competing on transatlantic routes. "Heathrow is a hugely important market and one where Delta has long wanted greater access. Our options were limited, so when the opportunity came along for a deal with Virgin we moved quickly. |
| "As we unite two leading global airline brands in an innovative partnership that focuses on delivering enhanced benefits and services for our customers, we also become a more formidable competitor across the Atlantic." | "As we unite two leading global airline brands in an innovative partnership that focuses on delivering enhanced benefits and services for our customers, we also become a more formidable competitor across the Atlantic." |
| He claimed that the partnership would "drive great value, and not just for shareholders", adding that employees and customers would also benefit. | He claimed that the partnership would "drive great value, and not just for shareholders", adding that employees and customers would also benefit. |
| The sale marks the end of Singapore Airlines' financially disastrous investment in 49% of Virgin Atlantic, which it purchased for £600m in 1999, and has now sold for $360m (£224m) to Delta. | |
| Bastian said he was sure that the Atlanta-based Delta would not lose out in the same way as Singapore. "It's really simple, from a commercial standpoint. There's 20 times the volume across the Atlantic." | Bastian said he was sure that the Atlanta-based Delta would not lose out in the same way as Singapore. "It's really simple, from a commercial standpoint. There's 20 times the volume across the Atlantic." |
| Craig Kreeger, chief executive of Virgin Atlantic, promised that despite the predictions of rival IAG boss Willie Walsh, Delta would not subsume Branson's airline. He said: "Some people questioned our brand identity. I am here today to wholeheartedly reiterate that the Virgin Atlantic brand will continue true to its roots." | |
| The agreement, he said, allowed Virgin "to stretch our wings even further, and continue innovating. We know that we will be bigger and better together." | The agreement, he said, allowed Virgin "to stretch our wings even further, and continue innovating. We know that we will be bigger and better together." |
| Bastian said: "The reason we're investing is that we think it's a wonderful brand. We're not interested in doing anything that will change that." | Bastian said: "The reason we're investing is that we think it's a wonderful brand. We're not interested in doing anything that will change that." |
| The codeshare will come into force from 3 July and will give each airline's customers access to the other's loyalty schemes and lounges. Combined, they will offer 23 weekday flights to North America from Heathrow – nine to New York, and direct daily services to Los Angeles, San Francisco, Chicago and Washington, with Seattle likely to follow. | |
| The European commission and the US justice department gave clearance last week. Approval from the US transport department is expected by the end of this year, allowing a full joint venture in early 2014. | |
| This would, said Kreeger, allow the two to "develop a collective schedule" rather than a competitive one, spacing flights throughout the day rather than clashing at peak times. | |
| Virgin and Delta announced the plans to enter into a joint venture in December, targeting the market dominance on transatlantic flights of British Airways and American Airlines, who have been operating in a similar way since early 2011. |