As expected, following Delta’s acquisition of a 49% stake in Virgin Atlantic from Singapore Airlines, Delta and Virgin Atlantic have applied for anti-trust immunity for transatlantic flights from London Heathrow.
Delta will continue to operate a joint-venture with Air France-KLM for transatlantic flights to points beyond London Heathrow.
Anti-trust immunity will enable Delta and Virgin Atlantic to co-ordinate the scheduling, pricing and marketing of flights by the two airlines. British Airways and American Airlines currently have such anti-trust immunity. Delta’s fellow SkyTeam partners Air-France KLM and Alitalia are also included in the application.
The application is available to view online.
Much of the application focuses on the competitive landscape at London Heathrow and the difficulty new entrants have competing against American Airlines and British Airways both in securing slots at times that are competitive and operating flights with a sufficient frequency to win corporate contracts.
The document does also provide an indication of what we can expect from the joint-venture which will launch six months after regulatory approval is granted:
– Delta and Virgin will co-ordinate their schedules on the London – New York route to provide a near “shuttle” type service and maximise connectivity to Delta’s domestic network at New York JFK.
– Delta and Virgin will also co-ordinate their schedules on the London – Boston route (currently served by each airline daily)
– Delta will launch a direct flight from London to Seattle. Northwest Airlines previously operated this flight shortly after the Open Skies treaty opened up Heathrow in 2008. However, this proved to be short-lived. Delta is confident that Virgin’s point of sale presence in the UK and Delta’s US network will make this a success
– There is the possibility of an additional Delta London Heathrow – Detroit flight and frequency increases on other Virgin routes.
– There is also the possibility of a new direct service from London Heathrow to Salt Lake City.
Interestingly, what the document doesn’t mention is any plans for services to Delta’s hub in Atlanta which I would expect Delta would want to increase from the current thrice daily services.
The above also highlights some of the constraints under which the joint-venture will operate, namely how the slots to secure any extra services will be secured.
Virgin Atlantic, I understand, has fully utilised of all its available Heathrow slots. Delta has indicated that a slot for a new London – Seattle service has been secured from Alitalia. It is not certain whether slots for any additional transatlantic services would be secured from either Virgin’s existing portfolio which would mean route network changes or from fellow SkyTeam partners. This is a significant constraint not faced by American Airlines and British Airways when launching new services and co-ordinating schedules.