Last week, Delta bought 49 percent of Richard Branson's Virgin Atlantic, launching a joint venture between the two airlines as well as a spat between Branson and British Airways CEO Willie Walsh.
Walsh angered the Virgin boss by suggesting the deal would lead to consolidation and the disappearance of the Virgin brand. When Branson bet Walsh $1.6 million (to be paid to either company's employees) that Virgin would still exist in five years, Walsh proposed a knee to the groin instead of the money.
Branson accepted. And from what Delta is planning, it looks like he's going to win.
At a Delta/Virgin press conference last week, Business Insider asked Delta CEO Richard Anderson if there was any credence to Walsh's suggestion. "No," he replied curtly, "That actually gets my blood to boil...The whole purpose is to join the networks and join the brands together."
In a phone conversation today, a Delta spokesperson reaffirmed the plan to retain the Virgin brand. The two airlines will continue to operate separate flights, but will collaborate on scheduling, and share costs and revenues.
Customers will know which airline they are flying when they buy their tickets, and the frequent flier programs will be merged.
Craig LaRosa, a principal at innovation and design consultancy Continuum, believes Delta has bought itself a chance to improve its own brand. Virgin is one of the few airlines with loyal customers and is a "standout in the industry," he says.
Instead of taking Virgin's profitable slots at congested Heathrow Airport in London and gutting the brand, Delta can mine Virgin's experience.
Some of that could be adopting the little things Virgin does to make long flights more pleasant. "Virgin is really well known for doing simple things and making them sophisticated," LaRosa says. For instance, passengers can order their meal when they want. "That's one of the things Delta can learn from Virgin."
For now, Delta is not offering specific examples of how the joint venture will change the in-flight experience, but it is excited about the positive impact Virgin could have on its own brand.
"It's a great association for us," the spokesperson said.
Based on the company line and the potential upside for Delta in using Virgin to bolster its own reputation, come 2017 we expect Willie Walsh will be (supposed) to go to Virgin headquarters to get kneed in the groin.
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