By Andrew Longstreth
NEW YORK (Reuters) - Delta Air Lines Inc (DAL) and Virgin Atlantic Airways Ltd(VA.UL) are on track to receive immunity from U.S. antitrust laws to operate a planned trans-Atlantic joint venture.
In a filing on Friday, the U.S. Department of Transportation said it had tentatively concluded that the alliance, which involves Delta buying a 49 percent stake in Virgin Atlantic, would promote competition and would provide benefits to consumers in the North America-United Kingdom market.
Delta and Virgin Atlantic announced the joint venture in December. Delta agreed to buy the Virgin Atlantic stake from Singapore Airlines for $360 million.
The deal would help Delta and Virgin better compete in the market for business travelers, according to analysts, and also would give them an advantage over American Airlines and US Airways, whose merger is being contested by the U.S. Justice Department.
Among the consumer benefits the airlines touted are increased cooperation on flights from the United Kingdom to North America, including nine daily round-trip flights from London Heathrow Airport to John F. Kennedy International Airport in New York and Newark Liberty International.
The Transportation Department concluded that the proposed alliance would "ultimately create a strong, competitive counterweight" to another joint venture known as oneworld, which includes American Airlines, British Airways, Finnair and Iberia.
The Transportation Department gave parties 14 days to lodge objections to its conclusions. If no objections are made, it said its tentative finding and conclusions would become final.
Delta shares rose half a percent to $19.73 on Friday.
(Reporting by Andrew Longstreth; additional reporting by Alwyn Scott; Editing by Howard Goller and Ken Wills)
- Board & Management Changes
- Mergers, Acquisitions & Takeovers
- Virgin Atlantic
- Delta Air Lines Inc
- American Airlines