Delta, Virgin Atlantic File Antitrust Immunity Application

Filing marks significant milestone in creation of joint venture between North America and the United Kingdom, expanding competition in critical business markets

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Delta Air Lines

Apr 08, 2013, 02:47 ET

ATLANTA and LONDON, April 8, 2013 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) and Virgin Atlantic Airways Ltd. have filed an application with the U.S. Department of Transportation seeking antitrust immunity for their new joint venture on flights between North America and the United Kingdom.

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The application marks a significant milestone in the creation of the joint venture. The joint venture will allow Delta and Virgin to be more effective competitors on routes between North America and the U.K., particularly between the U.S. and London, by expanding the quantity and quality of travel options for customers of both airlines.

In their filing, Delta and Virgin Atlantic noted that nearly 60 percent of the slots at London Heathrow Airport are controlled by the American Airlines/British Airways joint venture which, as a result, dominates air travel between the U.S. and the U.K., including the New York-London market, which is the most important business market in the world. By combining Virgin's Heathrow slots and U.K. brand strength with Delta's powerful U.S. network, the joint venture will offer significant competition in the market and benefit consumers on both sides of the Atlantic.

"Our proposed joint venture will mean an expanded schedule with more frequencies and destinations for customers traveling between the key business markets in the U.S. and the U.K.," said Delta President Ed Bastian. "Approval of antitrust immunity would allow travelers to take full advantage of all the aspects of the Delta-Virgin joint venture and enjoy the benefits of increased competition, particularly on flights to and from London Heathrow Airport."

"Today's filing for antitrust immunity marks the next step towards the full implementation of this joint venture between two great airline brands," said Virgin Atlantic Chief Executive Craig Kreeger. "Consumers will reap the rewards of this joint venture on services between the U.K. and the United States, Canada and Mexico through a shared ethos in the highest standards of customer service and much more effective competition to and from Heathrow. We are confident that the DOT will recognize this consumer benefit."

Under the proposed joint venture, Delta and Virgin Atlantic would coordinate schedules, network planning, pricing and revenue management functions, sales and other aspects of their services between North America and the U.K. Through the joint venture, the carriers would together offer a greatly expanded network at Heathrow despite slot constraints, which have limited the growth of both airlines in the U.K. – North America market. The two carriers would operate a total of 31 peak-day round-trip flights between the U.K. and North America, 23 of which would operate at London-Heathrow. The enlarged network will benefit customers of both carriers by providing greater access to key markets, improved connectivity and convenient booking options. The airlines plan to implement codesharing, frequent flier program reciprocity and shared lounge access.

In addition, if antitrust immunity is approved, Delta plans to begin new nonstop service between Seattle and London-Heathrow, expanding competition on that important business market. The new service would complement Delta's growing international gateway in Seattle.

Delta already operates an industry-leading trans-Atlantic joint venture with Air France KLM and Alitalia. In their filing, the airlines are also seeking antitrust immunity for five-way coordination on U.K. – North America traffic flows among Delta, Virgin Atlantic, Air France, KLM and Alitalia to facilitate the effective operation of the two joint ventures.

Last year, Delta and Virgin Atlantic announced an agreement under which Delta will acquire a 49 percent equity stake in Virgin Atlantic's parent company.

About Virgin Atlantic Airways

Virgin Atlantic flies to 36 destinations worldwide, including locations across North America, the Caribbean, Africa, the Far East and Australia. Some of its most recent additions to its flying network include Cancun, Vancouver and Mumbai. The airline's Little Red domestic services fly from Heathrow to Scotland and Manchester. Virgin Atlantic has enjoyed huge popularity, winning top business, consumer and trade awards from around the world and was recently placed 8th in the UK Coolest Brands League. The airline has pioneered a range of innovations setting new standards of service, which its competitors have subsequently sought to follow. Despite Virgin Atlantic's growth the service still remains customer driven with an emphasis on value for money, quality, fun and innovation. Virgin Atlantic currently has 41 aircraft in its fleet which includes 747-400s, A340-300s, A340-600s, A330-300s and A320s.

About Delta Air Lines

Delta Air Lines serves more than 160 million customers each year. Delta was named by Fortune magazine as the most admired airline worldwide in its 2013 World's Most Admired Companies airline industry list, topping the list for the second time in three years. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 319 destinations in 59 countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. The airline is a founding member of the SkyTeam global alliance and participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 15,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. Delta is investing more than $3 billion in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. Additional information is available on delta.com, Twitter @Delta, Google.com/+Delta and Facebook.com/delta.