Virgin Group and Sir Richard Branson will retain the majority 51 percent stake and Virgin Atlantic Airways will retain its brand and operating certificate.
"It signals the start of a new era of expansion, financial growth, and many opportunities for our customers and our business," says Branson, Virgin Atlantic president.
The Delta/Virgin Atlantic joint venture is expected to create an expanded trans-Atlantic network and enhance competition between the U.K. and North America. The airlines will file an application with the U.S. 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 U.S. Department of Justice and the European Union's competition regulator and other relevant authorities. The share purchase and the joint venture are 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,” says Steve Ridgway, Virgin Atlantic chief executive. “The trans-Atlantic market is Virgin Atlantic's heartland; it's where we started. By aligning with Delta, we can continue to grow our North American network and offer greatly enhanced connectivity across the USA."
Highlights of the agreement include:
An integrated joint venture that will operate on a "metal neutral" basis with both airlines sharing the costs and revenues from all joint venture flights.
A combined trans-Atlantic network between the United Kingdom and North America with 31 peak-day, round-trip flights.
Enhanced benefits for customers, including cooperation 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 Airport and Newark Liberty International Airport.
Reciprocal frequent flyer benefits.
Shared access to Delta Sky Club and Virgin Atlantic Clubhouse airport lounges for elite passengers.