Implications Of Delta-virgin Atlantic Deal

By Author: Steve Robinson
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Travelers are anxious to hear what, if any, impact Delta’s purchase of a 49 percent stake in Virgin Atlantic will mean to the availability of cheap fares, particularly cheap airplane tickets and cheap vacation packages.

Short term, this $360 million deal is not expected to result in significant changes for fliers. Experts view it as a continuing effort by Delta to increase its access to flights between the U.S. and U.K., which are regarded as among the most prestigious and profitable in the world.

Delta’s new ownership position in Virgin Atlantic will provide it with about 25 percent of the U.S. U.K. market, placing them in second place behind American Airlines and British Airways who control 60 percent of the market.

There are no immediate plans to merge the frequent flier programs between Delta and Virgin Atlantic. However the new venture will provide Delta fliers more convenient access to London through codeshare operations. Delta has been unable to increase its number of flights to Heathrow because slots at the airport are tightly controlled.

Experts believe that Virgin will eventually ...
... join the SkyTeam alliance formed by Delta, Air France, KLM, and other airlines that allow frequent flier miles/points to be used on any airline in the alliance. Virgin Atlantic has said that it will decide over the next few months whether to join the alliance.

The largest immediate change fliers will notice is that they will be able to book flights on either Delta’s or Virgin Atlantic’s websites that include segments on both airlines, although the two airlines will continue to operate their own flights. The combination provides U.S. customers greater access to existing services, including both airlines’ club lounges for First and Business class fliers as well as elite frequent flier members, but will not increase either airline’s capacity.
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