Virgin Delta joint venture mooted

A joint venture on transatlantic flights between Virgin Atlantic and Delta Air Lines is being mooted if the US carrier buys Singapore Airlines’ 49% stake in the UK airline, a report claims.

Reuters quoted a source close to Virgin as saying that founder Sir Richard Branson was not immediately looking to sell any of his 51% shareholding and was “concentrating on working with Delta” which is closing in on agreeing a deal to buy SIA’s stake.

Delta and Virgin plan to set up a revenue-sharing deal on flights between the UK and US, which would involve a codeshare agreement, allowing both to sell flights on the other airline and share revenues from ticket sales, the source said.

The joint venture could eventually lead to the pair sharing costs and bringing their prices and schedules into line.

The partnership would be similar to the joint business agreement between British Airways and American Airlines on North Atlantic routes which has been in place since 2010.

SIA and Delta are still in talks over the sale of the stake, which the Asian carrier bought for £600 million in 1999, but now wants to sell to refocus on its key markets.

Weekend reports in the British press said Air France-KLM, which also has a partnership with Delta on some transatlantic routes, was in talks to buy part of Sir Richard’s stake – a deal which would effectively give Delta and Air France-KLM control over Virgin Atlantic.

But he is unlikely to sell down his stake in the near future, the source added.

The European Union requires that EU carriers be under European control, meaning Delta would need an EU airline as a partner if it wanted majority control of Virgin Atlantic.

If Air France-KLM were to buy a small percentage of Sir Richard’s shareholding, then Virgin Atlantic could continue to be European-controlled.

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