Virgin Atlantic's decision to switch US partners this August reflects the growing business links between Virgin's chairman Richard Branson and Continental's chairman and main investor, David Bonderman. Bonderman has invested in Virgin's cinema and rail activities and, a source close to Branson says, the two may look at other joint airline activities. However he rules out a direct Bonderman investment in Virgin Atlantic.

'Continental is an excellent match,' says Virgin. 'They offer compatible service with their combined business/first class cabin that is modelled on Virgin's Upper Class.'

Virgin and Continental will purchase blocks of seats on each other's transatlantic services. Virgin is beefing up services from London to the US this summer, adding second daily flights to Los Angeles and Continental's Newark hub, and transferring its Miami flights from Gatwick to Heathrow. Its other US gateways are Boston, New York/JFK, Orlando, San Francisco and Washington DC. Continental flies from Newark to Gatwick and Manchester, and from Houston to Gatwick.

Delta and Virgin say the decision to dissolve their three-year partnership is mutual. Delta is believed to have complained that the revenue split favoured Virgin. For Delta, a key purpose behind the codeshare was access to Heathrow, but both Delta and Continental hope to achieve direct access if there is a US/UK open skies deal.

Earlier this year, Delta announced its intention to end its codeshare arrangement with Varig. Delta plans to fly to Brazil in its own right, initially with a daily flight from Cincinnati and Atlanta to Sao Paulo as well as a daily New York-Sao Paulo service.


Source: Airline Business