Graham Warwick/ATLANTA

THE US DEPARTMENT of Transportation (DoT) has approved Delta Airlines' space/code-sharing deal with Virgin Atlantic Airways, for which Delta first applied in April 1994.

The agreement will give Atlanta, Georgia-based Delta its first access to London Heathrow through seat blocks purchased on Virgin flights from Newark, Kennedy, San Francisco and Los Angeles. The deal also includes Virgin flights to London Gatwick from Boston, Miami and Orlando.

The DoT says that it approved the agreement after a "thorough review". It admits that it had hoped to tie the deal to a liberalised US-UK air-service agreement, but says that because of its significant benefit to Delta, the agreement "...was worth approving on its own".

Delta says that it will take at least three months for the Virgin agreement to take effect. The airline has been using blocked-space deals on international routes.

The US airline is also reducing US domestic services, strengthening certain hubs and relying more on Delta Connection regional carriers for short-haul flights.

Daily services will be reduced from 2,715 to 2,650 on 1 May, adding flights at Atlanta, Cincinnati and Salt Lake City and cutting them at Boston, Dallas/Fort Worth, Los Angeles and Orlando. Cincinnati will become the airline's number two hub, moving ahead of Dallas/Fort Worth, which is American Airlines' home base.

"We're going to fly more long-haul flights, while reducing short-haul service in some markets," says senior Vice-President for marketing, Robert Coggin. Delta Connection carriers Atlantic Southeast, Business Express, Comair and SkyWest Airlines will take over some of the short-haul flights.

Coggin expects cost savings and revenue increases from the restructuring to contribute $40 -$60 million to a return to profitability.

Source: Flight International