Delta Air Lines is buying a 49 percent stake in Virgin Atlantic from Singapore Airlines for $360 million, with the US airline aiming for access to more slots at the world's most in-demand airport.
Delta is proposing to form a joint venture with Virgin on routes between the UK and the US,
Virgin Group, headed by Richard Branson, however, insists it does not plan to sell its 51 percent controlling majority in the airline.
Heathrow Airport is one of the world’s busiest hubs and takeoff and landing rights are limited because of high demand and tight capacity, says the New York Times.
Delta has nine daily flights to Heathrow from New York, Boston and Atlanta. But no direct flights from other top markets like San Francisco, Chicago, Washington, D.C., Miami or Los Angeles.
The UK government has rejected a third runway at Heathrow . As a result, says the NYT, slots are limited, making them" rare and prized commodities" for the airlines.
Delta has just 0.3 percent of the Heathrow slots. British Airways dominates with 53 percent of the slots, followed by Lufthansa of Germany, with 5.6 percent, and Virgin with 3.3 percent. American and United each have 2.3 percent.
British Airways’ hold on the airport actually increased in the last year after it bought British Midland from Lufthansa.
Delta’s move is a challenge to American Airlines and British Airways, partners in the Oneworld global alliance. The two dominate the New York to London market with 15 daily flights and departures every 20 or 30 minutes in the peak evening hours.
The announcement in New York came a day after Virgin disclosed its plans to start domestic flights within the United Kingdom in the spring, with service to Edinburgh and Aberdeen in Scotland.