There are some reports filtering around that Delta may be interested in taking on an investment in Virgin Atlantic.  Specifically, the reports say that Delta is interested in buying the 49% ownership share that Singapore Airlines holds currently.

Singapore Airlines has wanted to exit this relationship for some time now so that part makes sense.  Singapore Airlines has also been a constraint for Virgin Atlantic in prior years because Singapore has some veto on how Virgin may operate and market itself in the Asia Pacific region.

However, the real speculation is that many think this is Delta’s opportunity to gain better access to London Heathrow airport.  It’s possible that Delta might be persuasive in getting Virgin to work with it on slots but somehow I think this isn’t exactly what Virgin has in mind.  Those slots are extremely valuable assets.

Would this mean an airline alliance for Virgin Atlantic?  I think so.  Even Richard Branson has hinted around at the idea of Virgin joining such an entity and there was some speculation that Star Alliance might be the most interested party.  But SkyTeam could work, too.

The problem is that Virgin isn’t a very attractive party in the alliance game.  It has no local network to offer partners.  In light of that, I think Delta sees Virgin’s value and success diminishing over time and it could wield influence in the not so distant future to get Virgin to release slots and gate space to it in London.  Even that leaves Delta somewhat at a disadvantage since there is no regional network to connect to beyond London.  Not really.

SkyTeam’s alliance partners in Europe are Air France and KLM predominantly.  Neither have substantial networks out of London and don’t seem to plan anyway at present either.

Filed under: Airline News by ajax
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