DOT tentatively approves Delta-Virgin Atlantic joint venture

Washington DC
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The US Department of Transportation (DOT) tentatively approved an immunised joint venture between Delta Air Lines and Virgin Atlantic Airways today.

"We tentatively conclude that, overall, the alliance will be precompetitive," says the regulator in a filing, citing stronger inter-alliance competition across the Atlantic and between New York and London specifically.

The tentative move brings the two carriers one step closer to implementing their metal neutral alliance between the UK and USA by the end of the year, which is in line with their public timeline for the deal.

"Delta Air Lines welcomes the US Department of Transportation's show cause order issued today," says the Atlanta-based airline. "Delta and Virgin [Atlantic] were confident that the significant benefits for consumers would be recognised including more choice in flight schedules, services and fares."

The immunised alliance will allow the airlines to coordinate their network planning, revenue management, pricing, sales and other functions between the two countries.

The joint venture will be separate from Delta's immunised alliance with its SkyTeam partners Air France, Alitalia and KLM, however, all of the carriers will coordinate on traffic flows across the Atlantic.

Delta, Virgin Atlantic and any other interested parties have 14 days to comment on the tentative approval before the DOT will move on a final decision.

The European Commission approved the immunised alliance in June.

Delta owns a 49% stake in Virgin Atlantic, which is bought from Singapore Airlines for $360 million in June as a prerequisite to the alliance.