The Virgin Atlantic-Delta transatlantic business will offer buyers a “competitive alternative” to the existing British Airways-American Airlines joint venture.
Virgin’s CEO Craig Kreeger (pictured) told BBT that the joint venture with Delta was likely to be approved in the US “within the next couple of weeks”.
He said there have been no objections before or since the US Department of Transportation issued preliminary approval for the joint venture earlier this month.
“So we expect approval at any time, and I wouldn’t be surprised if it was in the next couple of weeks,” said Kreeger. “That will be a big deal, it’s another big step.
“We began in July offering codeshares across both of our networks, with frequent flyer earn-and-burn and reciprocal lounge access. So we’ve begun doing things that drive value – but what I think will begin to drive more value for travel buyers is co-ordinating, selling and working together to offer a competitive alternative in this marketplace.”
Kreeger added: “But that doesn’t begin until after we have we’ve anti-trust immunity. Legally we remain competitors until the DOT issues that final order.“
Delta has already completed the purchase of a 49 per cent stake in Virgin Atlantic from previous shareholder Singapore Airlines.
Kreeger said that the new Little Red domestic service from Heathrow to Manchester, Edinburgh and Aberdeen was a key part of increasing connectivity within the network. He admitted traffic on Little Red “does need to grow - but we expect it to.” He said currently 27 per cent of passengers were “connecting traffic” and he expected this percentage to increase.
"One of the reasons why we remain confident we can make this work - when it wasn’t so easy for Bmi - is because we will measure success or failure by the combined incremental revenue on our network,” he said.
The Virgin boss told BBT that joining Skyteam – Delta’s alliance – is not a simple decision for his airline. “We have very good partners that drive value around the world that are not Skyteam members.”
He said with 60 per cent of Virgin’s route network between the UK and North America, the next six-to-nine months would see the airline “laser-focused” on a successful relationship with Delta, rather than the issue of whether or not to join Skyteam. “We will get to that question, but its not a simple answer. We’ll have to weigh up the values of our current partners and a partnership with Skyteam,” he said.
Kreeger was talking to BBT at the Virgin Atlantic Agency Awards in central London.
virgin-atlantic.com