Delta Airlines Inc.
) and Virgin Atlantic Airways is set to launch their proposed
joint venture (JV) in summer 2014 by combining their service
offerings, thus adding flight options for trans-Atlantic
Looking back, in Dec 2012, Delta proposed to acquire a 49%
stake in British carrier Virgin Atlantic from Singapore Airlines.
The acquisition closed in Jun 2013, and in Sep 2013, Delta
cleared the final hurdle by winning the U.S. Department of
Transportation's (DOT) approval to the deal.
Both carriers are prioritizing customer convenience by
aligning their slots at London's Heathrow airport. Delta will
move its London-based flights from New York, Boston and Seattle
to Virgin's Heathrow terminal. The co-location of terminal will
be accretive to both sets of customers as it will reduce the time
for connecting flights, thus paving the way for a rich flying
Delta in accordance with Virgin Atlantic will also launch a
second daily service between Heathrow and Detroit Metropolitan
airport beginning Jun 2014, targeting corporate flyers preferring
an early morning arrival at London.
Meanwhile, Virgin Atlantic is also rescheduling its service
between Heathrow to New York's Newark from late afternoon to
early morning to tap business customers between two of the most
lucrative business markets. This flight is part of the promised
nine daily roundtrip flights in the London-New York route.
Sussex, UK-based Virgin has also pushed back its afternoon and
evening flights between Heathrow and Boston by two hours to
complement Delta's morning service in the same route. The
realignment of service will offer more flexibility to customers
within the same route.
We believe that apart from benefiting the flyers, the
co-location and rescheduling of flights will allow both carriers
to target a separate set of customers and at the same time
leverage from each other's commanding position in either side of
Delta operates with the likes of
United Continental Holdings Inc.
) and carries a Zacks Rank #2 (Buy). However, sector stocks
U.S. Airways Group Inc.
Spirit Airlines Inc.
) look better with a Zacks Rank #1 (Strong Buy).
DELTA AIR LINES (DAL): Free Stock Analysis
US AIRWAYS GRP (LCC): Free Stock Analysis
SPIRIT AIRLINES (SAVE): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
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