It’s all just rumor, and that’s why I’m not writing about it yet. But I’m sure you guys want to talk about it. So what do you think about the idea of Delta buying a 49% stake in Virgin Atlantic? Love it? Hate it? Smart? Stupid? Personally, I think it’s way too early to comment since we don’t know how this would even be structured, but it could be brilliant if done correctly (and for the right price).
-
-
-
-
Written by Southeasterner on December 7, 2012. Reply
I believe it is to protect foreign investors from making a horrible decision to buy a US airline.
-
-
-
-
Written by jeremy anderson on December 7, 2012. Reply
Cranky – why do you think this is good, but you are opposed to sub brands, like Song?
-
Written by CF on December 7, 2012. Reply
jeremy – This is a pretty different scenario since it’s not a sub brand. Delta would only own a part of it. Internationally, ownership laws prevent true merging into a single entity and that’s too bad. Because that would be the best option. But ultimately it comes down to getting more slots in London, and a lot of them during the prime time hours. So if the price is right and that requires doing something creative like this, it makes sense.
-
-
Written by David SF eastbay on December 7, 2012. Reply
DL could care less about VS other then it can try and use a DL/VS team up at LHR to try and beat the AA/BA team up. That will never happen since BA is so much bigger then VS. DL would get very little benefit other then some codeshares to/from LHR.
-
Written by EricInChi on December 7, 2012. Reply
I agree that it is just chatter at this point so not going to get worked up. IF its true, I’m sure we agree that it is a poke in the eye to AMR/IAG. With the two key OW actors preoccupied (AA’s BK reorg and IAG’s BA/IB merger indigestion) now is the time to make a move to get some kind of foothold in Europe’s largest market.
I think the big caveat in a potential DL/VS deal will be regulatory hurdles on both sides of the Atlantic. Already having JV privileges in force in the #2 & 4 Euro markets will make a tough sell for justifying a third.
-
Written by Sanjeev M on December 7, 2012. Reply
At the right price, I can see how a DL/VS deal is valuable to both parties. DL gets some flexibility in LHR slots and beefed up frequencies against AA/BA. DL also gets access to Virgin frequent flyers.
But for the most part, DL has enough seats to LHR from all their hubs and BOS. They can upguage if needed. The Skyteam lounge is one of the best in the system and they have the beyond network in the US to feed these people across the Americas. They may not get all the corporate contracts that AA/BA does but there’s more to the world than JFK-LHR. Therefore the price and ability for DL to make VS/LHR decisions is critical to this deal.
Any feed that VS could provide e.g. BOM is already covered by DL/AF/KLM at more convenient airports like AMS or CDG. KLM covers way more of the UK with way more frequency than VS ever could out of LHR.
Previously it seemed right that with DL and Virgin Australia that all the Virgin carriers were going to be dragged into Skyteam. Now with crazy cross-alliance games and “strategic partnerships” this may change. SQ (which owns the stake in VS) is now friends with VA. But VA also likes Etihad, which likes AF/KLM, who happen to be DL’s buddies.
Branson may also force DL to help Virgin America in return for VS’ hand in marriage.
So it could happen. DL is opportunistic, and might just go for it, at the right price. A380 in DL colors anyone?
-
-
Written by Samara Citizen on December 7, 2012. Reply
If Delta buys stake in Virgin Atlantic then they can use Virgin Atlantic brand as sort of an umbrella for the transatlantic joint venture with Air France-KLM. A joint venture of DL and AF-KL can be further (compared to now) materialised in the form of VS.
I would also take into account plans for more cooperation between AF/KL and Etihad and the already signed agreements between Etihad and Virgin Australia on the one hand and Virgin Australia and DL on the other. A nice round-the-world axis.
-
Written by DesertGhost on December 7, 2012. Reply
I agree with Cranky. At the right price and under the right terms, this deal makes some sense. It’s too early to speculate further.
-
Written by judynagy on December 7, 2012. Reply
Virgin is my airline of choice to Europe. I think they are beyond wonderful. It would be great to be able to use my Flying Club miles with other partners intra-Europe. My only hope is that nothing in Upper Class gets changed … and that VAA would not be affected by the mentality of US domestic airlines and the prevailing policies of passenger torture.
-
Written by HPM1984 on December 7, 2012. Reply
This idea breaks me out in a cold sweat. Virgin with respectable customer service and respect for their customers in the hands of Delta Airlines. It would be like turning the hope diamond over to a pig in a stye.
And the idea of Virgin in any form being in an alliance that includes AF and KLM- two other airlines that truly deserve each other is enough to make me ill.
Will the Airline Gods have no mercy on us poor travelers. Next I know I will be reading a post from Cranky about USAIR buying Emirates of Singapore Airlines!
-
-
Written by David on December 7, 2012. Reply
on Delta’s part, could be genius. of the big US, they emerge right now the most innovative, as their merger has worked on scale. wi-fi everywhere, no res/ops glitches like UAL, DL smacks AA on transcon using domestic BusinessElite before AA a321s arrive. DL starts to mini-hub growing SEA w/ AL. They buy the airtrain 717s and exit fast expensive-to-operate 50 seat RJs – today bought 50 76-seat CR9s, ipads in LGA, MSP hubs, they’re missing premium product – VS. VS missing any US domestic feeder, and VS missing connecting from LHR.
-
Written by Carl on December 7, 2012. Reply
I don’t see how this makes a lot of sense for DL. VS doesn’t have enough service to create a meaningful amount of flow traffic for DL, and DL already has AMS and CDG for all the flow traffic. VS is really O/D focused. SQ has been trying to get rid of their stake in VS. Why will DL do any better? Being a much smaller #2 in a market dominated by BA isn’t a winning business model.
-
Written by Nick Barnard on December 7, 2012. Reply
I have a problem with the assumption here that DL would get LHR slots. DL would only be getting a 49% ownership share and would have no official role in managing VS. I’m sure they’d work in a code share into a purchase agreement, but I’m not sure regulators would go for a joint venture of the two, and I can’t see Branson allowing VS to give up slots in LHR.
-
-
Written by dan powers on December 9, 2012. Reply
has anyone done the research? the reason singapore wants to sell the 49% stake is because VS has been loosing money for the last few years…vs lost 25% of their feed from BMI (when bmi was purchased by BA)…I do not see how DL buying that 49% will provide vs any feed at their LHR hub.HOWEVER if branson is willing to sell some of his 51% ownership….well that is a different story….
-
Written by Axelsarkis on December 11, 2012. Reply
The news just broke: DL will pay $360 million for a 49% stake in VS, taking three seats on the board.
-
Written by Nick Barnard on December 11, 2012. Reply
That actually looks like quite a good deal, especially since DL is going for a Joint Venture..
I wonder if eventually this’d lead to DL taking over complete operational control of VS, given that DL wanting to do VS’s pricing…
-
-
-
Written by Ron on December 12, 2012. Reply
Also SFO. But none of these are places where Delta can feed a lot of passengers, so the main benefit would be giving Delta passengers a non-stop option, something that could be accomplished with a simple code share or frequent flier agreement. I think the benefit of a joint venture is pretty much limited to JFK — spreading the combined 7 flights to make a better schedule than what is in place now. No reason this shouldn’t be approved, given the much bigger JFK–LHR joint venture approved recently for AA and BA.
-
-
-
Comment Pages:
Leave a Comment
Subscribe for Free
Happening Now
Cranky Also Writes
Writing Intuit's "In the Trenches" column on running Cranky Concierge
Archives
Air Blogs/Forums
- Airline Reporter
- Airline Route
- APEX Editor's Blog
- Aviation Queen
- Bangalore Aviation
- Delta Airlines Blog
- EAS Flights
- Eye on L.A. Aviation
- Frugal Travel Guy
- Inside Traveller
- JetBlue BlueTales
- Jetwhine
- JohnnyJet.com
- LateDeparture.com
- LGB Spotting/News
- Middle Seat Terminal
- One Mile at a Time
- Online Travel Review
- PlaneBuzz
- Southwest Airlines Blog
- Swelblog
- Things in the Sky
- Things with Wings
- Thirty Thousand Feet
Advertisement
Advertisement
Advertisement
Find the Best Selection of Las Vegas Show Tickets & Orlando Show Tickets
Hot Topics
787 A380 Accidents/Incidents Across the Aisle Interviews Admin Advertising Airbus Air Canada Air France Air New Zealand Airplane Porn Airport Experience AirTran Alaska Airlines Alitalia Allegiant Alliances Aloha American Ask Cranky Baggage BNET Boeing British Airways Continental Cranky Concierge Cranky Jackass Customer Service DCA - Washington/National Delays/Cancellations Delta Distribution Emirates Environment ExpressJet Fares Frequent Flier Programs Frontier Fuel Go! Government Regulation Guest Posts Hawaiian Horizon Inflight Entertainment JetBlue JFK - New York/JFK Labor Relations LAX - Los Angeles LGA - New York/La Guardia LGB - Long Beach LHR - London/Heathrow Lufthansa Meals Mergers/Finance Mesa Airlines Midwest Airlines Miscellaneous Northwest Oneworld Operations Overbooking Qantas Republic Ryanair Safety/Security Schedule Changes Seats SFO - San Francisco SkyTeam Southwest Spirit Star Alliance Technology Trip Reports United US Airways Virgin America Virgin Atlantic Weather Westjet Who/What the F***
About | Directory | Shop | Awards | In the News | Ethics | Cranky Concierge
Powered by WordPress | SRS Solutions | © 2006-2013 Brett Snyder All Rights Reserved | Terms of Use | Privacy Policy
Comments
Leave a comment Trackback