Delta Air Lines said it will buy almost half of Virgin Atlantic for $360 million as it tries to catch up to rivals in the lucrative New York-to-London travel market.
Delta plans to form a joint venture with Virgin Atlantic so they can sell seats on each other’s flights, share the costs and profits, and set the flight schedules in ways that help both airlines. American Airlines has a similar deal with British Airways.
Because Delta would be setting fares and schedules in coordination with an airline it used to compete with, it said it will need antitrust approval from U.S. and European regulators in order to form a joint venture. Delta said the share purchase will happen with or without antitrust approval.
Delta is aiming to have the joint operation running by the end of 2013. Travelers would be able to buy one plane ticket from, say, Lansing, Mich., on Delta and connect in New York to a Virgin Atlantic flight to London. Travelers from Europe will also have a smoother transition onto Delta flights to locations inside the U.S. Delta said their frequent flier programs would be linked, too.
Combined, Delta and Virgin Atlantic have 31 flights a day in each direction between North America and the U.K., including nine each way between Heathrow and John F. Kennedy International Airport in New York and Newark Liberty International Airport in New Jersey.
Sir Richard Branson will still own more than half of Virgin Atlantic, which will continue to fly as a separate airline under its own name.
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