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23rd September, 2013.

Delta Air Lines, Virgin Atlantic Airways win US antitrust immunity

The US government today granted Delta Air Lines and Virgin Atlantic Airways antitrust immunity for their proposed transatlantic joint venture, saying it would likely boost competition.

The Department of Transportation (DOT) said it had approved the request from the two airlines for protection from prosecution over antitrust issues.

"We have concluded that, overall, the alliance and joint venture will be pro-competitive and are likely to generate substantial public benefits to the traveling public," DOT said in its order.

DOT said that it had received no objection to its tentative decision, announced August 30, to grant the antitrust immunity during the public comment period.

The joint venture will team Delta with British airline Virgin Atlantic on routes between North America and Britain.

In June, US and European Union antitrust authorities approved Delta Air Lines' proposed purchase of a 49 per cent stake in Virgin Atlantic to build a joint transatlantic service, after determining the deal would not hurt competition.

But the airlines also had sought the Department of Transportation's grant of immunity from any possible antitrust action under US law against the venture.

In their filing to the DOT in April, Delta and Virgin Atlantic noted that nearly 60 per cent of the slots at London Heathrow Airport are controlled by British Airways and its joint venture partners, including American Airlines.

Delta and Virgin Atlantic on Monday welcomed the DOT's decision, and unveiled a new schedule for the New York JFK-London Heathrow travel market offering a total of nine daily nonstop flights, beginning March 30.

"The DOT's ruling is confirmation of the clear consumer benefits of the partnership and will allow the airlines to deepen their cooperation, offering more flight choices for travelers on both sides of the Atlantic and in particular improving the travel options for business customers in the New York to London market," they said in a joint statement.

In December 2012 Delta announced it would buy Singapore Airlines' stake in Virgin Atlantic for $360 million, with the Virgin Group retaining its 51 per cent share.

Delta and Virgin Atlantic, combined, plan to operate a total of 32 daily nonstop flights between North America and Britain.

Twenty-four of them will operate between London's Heathrow and US cities such as Washington, Los Angeles, San Francisco and Atlanta, Georgia, Delta's most important hub.

Source: The Economic Ties

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