Branson: Virgin Atlantic needs partner to compete with BA-AA

New York
This story is sourced from Pro
See more Pro news »

Despite his opposition to airline industry alliances, Virgin Group founder Richard Branson said the alliance between British Airways and American Airlines left Virgin Atlantic little choice but to pursue a tie up with Delta Air Lines.

"I've always been anti-tie-ups. [They are] not good for consumers," Branson tells Flightglobal after an event at Newark airport in New Jersey marking the launch of Virgin America's service there.

But Branson says market realities-specifically the anti-trust immunity granted to the British Airways-American Airlines alliance-have led Virgin Atlantic down the alliance path.

Virgin Atlantic and Delta are currently seeking anti-trust immunity from the US Department of Transportation for an alliance on routes between North America and the UK.

Delta announced last year that it also agreed to purchase Singapore Airlines' 49% stake in Virgin Atlantic. Virgin Group and Richard Branson would retain 51% ownership.

"We decided we needed a big brother," Branson says of the proposed Delta alliance. "[It makes it] easier for us to combat the might of BA and AA."

He adds that an alliance would also help Virgin counter competitive challenges created by British Airway's partnerships with Qantas Airways and Cathay Pacific.

Branson says Virgin Atlantic will retain the streak of independence that he bred into the airline, even if it joins with Delta.

"Delta did not tie up with us to swamp us," he says, noting that he and Virgin Group will maintain majority ownership of the airline.

Branson adds that Virgin Group is looking at opportunities to start a Virgin-branded airline in India or, possibly, in South America.

"Nothing is definite," Branson clarifies. "Nothing is in the works."