Delta Air Lines buys 49 percent of Virgin Atlantic for $360 million

[BOX OFFICE]

This thing sounds an awful lot like the UAL-Aer Lingus fiasco from a few years ago.

 

[xkuzme1]

Money filtered from the company to start joint ventures is rarely put back into the main company. TWA money started or grew Texaco Oil, Century 21 and Hardees. Meanwhile the fleet aged and never got revitalized. Where is TWA today?

From a business perspective, $360 million was a steal for half of Virgin. But from an employee standpoint, the company will now be operating flights that will not be staffed by the Delta employees. Virgin will operate at an advantage and cause Delta to cut international flights to Europe, Africa, and the Middle East. It will allow Delta more cargo capacity that will be at a cost of the Delta pilots.

Bottom line, Delta will cut (and already had over the last year) international flights, and Virgin will pick them up with a stop in London. Delta will operate more flights to London and drop other destinations. International wipsaw.

X

 

[suupah]

Question. What is the duration of the current delta pilot contract?

 

[nwaf16dude]

Amendable 1 Jan 16

 

[BILL LUMBERG]

I would opine that this is actually very good news for Delta pilots and employees as a whole. From a business perspective, Delta has taken enormous steps to diversify its business (refinery, stake in VS, etc) which positions itself well to weather future economic downturns. This in turn should provide excellent job security to all Delta employees, including pilots. A stronger, more prosperous Delta can only benefit you guys in the long run.

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Ok Richard Anderson......come out from behind your avatar.

 

[BILL LUMBERG]

Money filtered from the company to start joint ventures is rarely put back into the main company. TWA money started or grew Texaco Oil, Century 21 and Hardees. Meanwhile the fleet aged and never got revitalized. Where is TWA today?

From a business perspective, $360 million was a steal for half of Virgin. But from an employee standpoint, the company will now be operating flights that will not be staffed by the Delta employees. Virgin will operate at an advantage and cause Delta to cut international flights to Europe, Africa, and the Middle East. It will allow Delta more cargo capacity that will be at a cost of the Delta pilots.

Bottom line, Delta will cut (and already had over the last year) international flights, and Virgin will pick them up with a stop in London. Delta will operate more flights to London and drop other destinations. International wipsaw.

X

Amen Brother!!!

 

[BILL LUMBERG]

What did the pilots get from the oil refinery? Probably better job security and maybe better profit share... Some deals are just strategic. Let's hope Delta does not completely outsource London flights to Virgin - that would be a negative....

Who would you rather fly on? Delta with the Gorillas in the mist or in Upper Class with the FINE Virgin Cabin staff?

I think we will see MAYBE status quo and probably a reduction later.....metal neutral or not.

 

[BILL LUMBERG]

This thing sounds an awful lot like the UAL-Aer Lingus fiasco from a few years ago.

Wrong......that was totally different.

 

[B727FA]

This thing sounds an awful lot like the UAL-Aer Lingus fiasco from a few years ago.

Not even close.

 

[General Lee]

Money filtered from the company to start joint ventures is rarely put back into the main company. TWA money started or grew Texaco Oil, Century 21 and Hardees. Meanwhile the fleet aged and never got revitalized. Where is TWA today?

From a business perspective, $360 million was a steal for half of Virgin. But from an employee standpoint, the company will now be operating flights that will not be staffed by the Delta employees. Virgin will operate at an advantage and cause Delta to cut international flights to Europe, Africa, and the Middle East. It will allow Delta more cargo capacity that will be at a cost of the Delta pilots.

Bottom line, Delta will cut (and already had over the last year) international flights, and Virgin will pick them up with a stop in London. Delta will operate more flights to London and drop other destinations. International wipsaw.

X

Wrong. Virgin's slots at LHR are FINITE. They can't get anymore INTL slots. They did just get 12 slots and will use A319s (3) on intra UK service, due to the agreement when BA bought BMI. They have to use those 12 slots on intra-UK. So, what Virgin flies now is what they will fly later. LHR has NEVER been a connecting hub for them. They fly to these places EAST from Heathrow---Narita, Hong Kong (and onto SYD with an A346), Shanghai, Delhi, Mumbai, and Dubai. Going South towards Africa, they go to Lagos, Accra, and Joberg. But wait, so do AF, KL, and AZ! Why again would DL send passengers through LHR, when the slots there are so expensive? Do you want connecting passengers, or just high priced business people? If you wanted connecting passengers, you would route them through CDG, AMS, or FCO, not high priced LHR. Those seats are WORTH something.

In London, Virgin Atlantic flies most of their flights from LHR, but also some through Gatwick, which is cheaper. They fly most of their Carribbean flights there, plus the daily flight to LAS, and a few daily to Orlando. Those flights are bargain basement. Tours. DL gave up on Orlando to London Gatwick years ago, unfortunately, but DL hasn't really made an effort to restart those, and those flights in MCO seem packed anyway with sunburned Brits.

What could DL do? If Virgin Atlantic's flights from LHR to SFO (for example) are weak in revenue, they could allocate that slot somewhere else, and instead route those Virgin Passengers to a Delta hub, like JFK, and then take DL onward to SFO. That is probably what will happen, reallocating slots to maximize the value of each, since they are FINITE.... Nobody else is selling them, and the airport is totally congested. Here are the current use of DL's LHR slots. I think DL currently has 9 flights a day into LHR---3 from ATL, 3 from JFK, 1 from MSP, 1 from DTW, and 1 from BOS. BOS may be on the edge IMO, but other than that I know they want a bridge from LHR to JFK (using both), and the rest could feed into the DL network. Not doomsday at all. What was the potential growth in LHR? Very little, it is SLOT CONTROLLED. Virgin can't buy many more either, and now they have to use those 12 they just got for intra UK. That's it.



Bye Bye---General Lee