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

[Flyby1206]

So why buy 49% to get a JV? Seems awfully expensive. Unless, of course, you think Branson would have gone with a Middle East carrier.

There were articles previously that rumored Qatar or Etihad would be interested in that 49% stake. If DL owns 49% then AF/KLM just needs to get 2% for Skyteam to have a majority ownership.

I think the end game is for AF/KLM to purchase Branson's 51% share (or some chunk >2%) when he gets old and retires from the business.

Skyteam has an impressive presence throughout Europe (AMS, CDG, eventually LHR).

 

[greasejob]

So why buy 49% to get a JV? Seems awfully expensive. Unless, of course, you think Branson would have gone with a Middle East carrier.

It wasn't Branson's decision to make since we bought the shares from Singapore. Given that CAL/UAL paid $208 for 4 LHR slots and we paid $360 for 49% of Virgin it appears we got a good deal. Virgin is losing money and who knows what would happen to the slots if they go out of business. They would probably sell them to the highest bidder which would probably be a middle east carrier. With this deal I think our access to LHR is pretty secure.

 

[greasejob]

There were articles previously that rumored Qatar or Etihad would be interested in that 49% stake. If DL owns 49% then AF/KLM just needs to get 2% for Skyteam to have a majority ownership.

I think the end game is for AF/KLM to purchase Branson's 51% share (or some chunk >2%) when he gets old and retires from the business.

Skyteam has an impressive presence throughout Europe (AMS, CDG, eventually LHR).

I think that's it. In addition, no carrier outside the EU could by more than 49% so Emirates or Ethiad would never be able to buy all of Branson's 51%.

 

[GIZMONC]

I think DL wants out of the regional business. As far as buying into another airline, I think DL can do whatever they want, to an extent. They can't have another carrier competing with DL. They can't own all of Frontier, for example, and then use it to compete against DL. The DL pilot contract has rules against that. If they did buy the controlling interest in another airline, I believe the pilot contract states they would have to merge lists, etc. But, as per EU rules, they cannot do that with an EU carrier. (hence the 49% stake) This is an investment, that still needs to be approved by the pilot union and the Gov'ts on both sides of the Atlantic. A Joint Venture means both airlines fly the routes, not just one. DL currently has 9 daily flights out of LHR, and there aren't anymore slots for sale currently. CAL bought 4 pairs of slots a few years ago for $210 million I believe. This investment was $360 million.


Bye Bye---General Lee

Wants out of the REGIONAL BUSINESS BUT BUYS 40 RJ's recently.
COME ON GENERAL LEE did you pull that out of your arse?

 

[777forever]

Wants out of the REGIONAL BUSINESS BUT BUYS 40 RJ's recently.
COME ON GENERAL LEE did you pull that out of your arse?

Got 60 CR2s off the balance sheet in a debt neutral transaction. Smart move if you ask me

Sent from my HTC One X using Tapatalk 2

 

[FDJ2]

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

Actually it doesn't because the Delta contract is far different than the UAL contract from a few years ago. Specifically sections 1.E.3, 1.E.8 and 1.E.9

 

[BILL LUMBERG]

So no money left for us 6 short months ago during a contract opening with unprecedented leverage in our favor?

Meanwhile, once the ink was drying, all the other SHEEPLE get raises like we did, we lose our crew bunks on the 330, and we spend the money which would have SOLIDLY put us on par with Southwest wages on another airline investment and watch THEM start flying our people.

Don't blame me....I voted NO.

DELTA +1
DALPA-10

 

[Golden Falcon]

guess soon GL can scratch London off his list, except maybe London, Kentucky

 

[GogglesPisano]

guess soon GL can scratch London off his list, except maybe London, Kentucky

Actually, according to the PWA, Delta pilot blockhours to the UK cannot decrease. However, we are probably looking at the loss of potential new flying.

 

[General Lee]

Wants out of the REGIONAL BUSINESS BUT BUYS 40 RJ's recently.
COME ON GENERAL LEE did you pull that out of your arse?

Hmmmmm. Maybe you didn't see the new contract. Get rid of 200+ 50 seat RJs, buy 70 76 seaters (the 40 recently bought were a part of that), and then add 88 717s to take over current 76 seater routes. What I stated was DL wants out of OWNING REGIONAL AIRLINES. They do own some RJs though, and offer them to the lowest cost provider. DL used to own ASA and Comair, but do not now.....


Bye Bye---General Lee

 

[General Lee]

guess soon GL can scratch London off his list, except maybe London, Kentucky

Here comes Golden, flying for the bottom airline in the ME..... I am surprised your airline flies to London at all. The way your airline is run, you may be scratching a lot more cities off of your own list. It might be time for you to head over to Shrajah or Kuwait to look for a better opportunity.

Anyway, the JV will have limits, including flying for both airlines at LHR. If not, it won't be approved. You know that!


Bye Bye---General Lee

 

[General Lee]

Actually, according to the PWA, Delta pilot blockhours to the UK cannot decrease. However, we are probably looking at the loss of potential new flying.

Without new slots available, where would the potential new flying be? DL was just able to source a 3rd nonstop a day to ATL, but that was about it. LHR may never get a new runway, and the congestion there is prohibitive. AA and BA had a lock on the most combined flights and choices. Now DL/VA gives an alternative.


Bye Bye---General Lee

 

[cbrown1]

I think this buy is a response to the AMR-US merger.
Delta knows that US air will join one-world and that BA and the NEW AA will try and compete on the world market like Dal and AF does.

 

[FDJ2]

Actually, according to the PWA, Delta pilot blockhours to the UK cannot decrease. However, we are probably looking at the loss of potential new flying.

Not really. Sections 1.E.8. and 1.E.9 were modified in our new contract to address that concern.

 

[FDJ2]

Don't blame me....I voted NO.

DELTA +1
DALPA-10

I'm glad your NO voted was an underwhelming minority position. The new contract has significantly better contract language protecting the interests of Delta pilots when Delta enters into JVs than the old contract.