Seeking to become more effective competitors on routes between North America and the United Kingdom, Delta Air Lines (NYSE: DAL ) and Virgin Atlantic Airways have filed an application with the U.S. Transportation Department seeking antitrust immunity for their new joint venture.
The companies said in a Monday press release announcing the filing that because 60% of the slots at London Heathrow Airport are currently controlled by a joint venture of AMR's American Airlines and British Airways, they dominate air travel between the U.S. and the U.K. Those two airlines previously received antitrust immunity allowing allowed them to coordinate their schedules and fares.
Combining Virgin's Heathrow slots with Delta's U.S. network will offer significant competition in the market and serve consumers on both sides of the Atlantic, the companies argue. Delta in December announced it is buying a 49% stake in Virgin from Singapore Airlines, with Virgin founder Richard Branson retaining a 51% ownership position.
Delta President Ed Bastian said in Monday's press release that "Approval of antitrust immunity would allow travelers to take full advantage of all the aspects of the Delta-Virgin joint venture and enjoy the benefits of increased competition, particularly on flights to and from London Heathrow Airport."
Under the proposed joint venture, Delta and Virgin Atlantic would coordinate schedules, network planning, pricing, and revenue management functions, sales, and other aspects of their services between North America and the U.K.
The airlines are also seeking antitrust immunity for five-way coordination on U.K.-to-North America traffic among Delta, Virgin Atlantic, Air France, KLM, and Alitalia. Delta already operates a joint venture with the other three European airlines.