Delta revealed that it has spent $360m (£223m) to buy Singapore Airlines’ 49 per cent stake in Virgin Atlantic – a holding that cost Singapore £600m in 1999.
Julie Southern, Virgin Atlantic’s chief commercial officer, said the change in shareholder was not sparked by “a bad relationship – it’s about competitive moves”.
The deal will create a joint venture that, pending antitrust approval, will grant Delta access to Virgin’s lucrative slots at close-to-capacity Heathrow. The firms will together operate 31 transatlantic round-trips per day in peak season, sharing airport facilities and eventually coordinating flight schedules.
Southern said she hoped that global regulators would approve the tie-up as it provides “really effective competition” with BA, which together with its partners holds 60 per cent of the market between London and New York.
Sir Richard Branson retains his 51 per cent of the business, and both sides insisted that the Virgin brand is an asset that will not be absorbed by the bigger firm. “[Sir Richard’s] leadership and brand of Virgin Atlantic is the centrepiece of the investment,” said Delta boss Richard Anderson.
Sir Richard tried to distance himself from a bet with BA boss Willie Walsh that the brand will not disappear, dismissing Walsh’s offer yesterday to stake “a knee in the groin” as “rather childish”.
Shares of Delta closed up 5.1 per cent at $10.66 yesterday.