US Department of Justice approves Delta’s investment in Virgin Atlantic

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Virgin Atlantic & Delta Air Lines Aircraft (Image Credit: Delta Air Lines)

The US Department of Justice has today, 20 July 2013, issued a statement confirming that it intends to take no further action in respect of the proposed acquisition by Delta Air Lines of Singapore Airlines’ 49% stake in Virgin Atlantic and the proposed joint-venture between Delta Air Lines and Virgin Atlantic for routes between London Heathrow and North America.

The European Commission has also issued a similar statement confirming that it has no concerns about the merger or joint-venture, citing sufficiently strong competition from American Airlines and British Airways.

It is important to note that Delta and Virgin Atlantic do not yet have anti-trust immunity for their joint-venture (this is currently being reviewed by the US Department of Transportation). This limits the extent to which Delta and Virgin can currently co-operate in areas such as scheduling, marketing and pricing.

Delta and Virgin Atlantic state that they intend to have the joint-venture up-and-running by the end of this year.

This confirms that the two airlines are exploring co-location at London Heathrow. In practice, this is likely to mean Delta moving into Terminal 3. Virgin has not yet committed to joining the SkyTeam alliance and the two airlines should shortly start providing reciprocal frequent flyer benefits.

As well as the pending joint-venture, it will be interesting to see what impact Delta’s investment (which includes placing two directors on the Virgin Atlantic board) will have more broadly on Virgin Atlantic.

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