Delta Airlines has bought a 49 per cent stake in Virgin Atlantic, creating a joint venture that will eye a larger share of the lucrative travel market between the US and UK.
Delta reportedly paid US$360 million to buy the stake from Singapore Airlines, which had paid $965 million for the share in 1999 but was later forced to write off the investment. Virgin Atlantic is 51 per cent owned by Richard Branson, who owns a 26 per cent share of Virgin Australia.
It was not clear what, if any, impact the deal would have on Virgin Australia, though it increased speculation that Delta would seek to buy a stake in the Australian brand. Virgin Australia already operates code sharing and reciprocal frequent flyer deals with both Delta and Virgin Atlantic.
Branson, meanwhile, denied speculation that he was seeking an exit from Virgin Atlantic, which lost $128 million last year as it struggled against high fuel prices and the Eurozone crisis.
Delta and Virgin Atlantic said they would apply for an anti-trust exemption that would allow them to develop a profit and cost-sharing alliance similar to the one operated by British Airways and American Airlines, which together hold about 60 per cent of the market for travel between the US and Britain.