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Delta, Virgin Atlantic meet at altar

Wednesday, December 12, 2012 - 02:06

Dec. 11 - In an effort to expand its access to London's Heathrow Airport, Delta buys a 49 percent stake in Richard Branson's Virgin Atlantic. Conway G. Gittens report.

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Delta CEO Richard Anderson is reaching for the stars with his airline - and shaking up the industry on the way up. His latest move - - buying a 49 percent stake of Richard Branson's Virgin Atlantic from Singapore Airlines for $360 million. But does that plan include getting rid of the Virgin Atlantic brand and the Branson name as suggested by trans-Atlantic rival British Airways? SOUNDBITE: RICHARD ANDERSON, CEO, DELTA AIR LINES (ENGLISH) SAYING: "No." "Actually, that actually gets my blood to boil just a little bit. I mean the whole purpose; Virgin Atlantic is an iconic brand and has the number one business class product between the U.S. and London Heathrow. The whole purpose is to join the networks and join the brands together and his involvement, his leadership and the brand of Virgin Atlantic, is the centerpiece of this investment." But London's Heathrow is the prize. With a foothold in Europe's busiest airport, the two air carriers will likely control one quarter of the trans-Atlantic market, according to Delta's predictions. Pending regulatory approval, the tie-up would rival the grip British Airways and bankrupt partner American Airlines hold on that route. Maxim Group analyst Ray Niedl says this is a smart competitive move on Delta's part. SOUNDBITE: RAY NIEDL, AEROSPACE ANALYST, MAXIM GROUP (ENGLISH) SAYING: "British Airways and American can not do much about it. They dominate Heathrow between the two of them. American is bogged down now in a restructuring, so the only one that really would make logic to try and interfere would be United. It's too late now for United and it would probably have anti-trust problems because they do have a number of slots themselves into Heathrow." Analysts say the deal is the latest in the industry's multi-year approach of consolidation, in hopes of rising above years of losses tied to high fuel and labor costs.

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Delta, Virgin Atlantic meet at altar

Wednesday, December 12, 2012 - 02:06

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