readytotaxi From United Kingdom, joined Dec 2006, 3472 posts, RR: 2 Posted (2 years 4 months 2 weeks 6 days 5 hours ago) and read 38889 times:
The London Sunday Times is reporting today that Delta has made a secret approach to Singapore Airlines to by out their 49% stake in Virgin. "Aviation sources said that the two sides were back in negotiations but it was early days yet"
Singapore paid £600m for its stake back in 1999, both side declined to comment to the newspaper.
If that happened it would give SkyTeam a much larger presence at Heathrow.
(No link to article as it is pay to view)
you don't get a second chance to make a first impression!
ota1 From Germany, joined Apr 2008, 406 posts, RR: 0
Reply 7, posted (2 years 4 months 2 weeks 6 days 4 hours ago) and read 38510 times:
With SQ have changed it's strategy towards Virgin branded airlines lately (close alliance with and 10% in Virgin Australia and the code share agreement with Virgin America just announced last week) in addition to VS's latest developments (proposesed alliance membership, shorthaul flights, having reached a 4 Star ranking with SkyTrax again, etc.) I'm not too sure SQ is still looking to sell it's shareholing in Virgin Atlantic.
Humberside From United Kingdom, joined Dec 2005, 4937 posts, RR: 4
Reply 8, posted (2 years 4 months 2 weeks 6 days 4 hours ago) and read 38419 times:
I'd be interested to see what DL/AF's attitude towards the leisure operations at LGW/MAN/GLA would be if together they took control of VS. For DL/AF it's surely about LHR whereas the leisure operations seem to revolve around Virgin Holidays. Keep them so long as they are profitable? Seperate and dispose? Wasn't there a report late last year, possibly from The Sunday Times, that VS could be split into two?
(Obviously if Richard Branson retains a majority share in VS then the future of the leisure operations is probably far more 'secure')
Quoting Deltal1011man (Reply 2): If DL/AF were to buy into VS it would mean a big codeshare....and very likely VS would move into the DL/AF/KL/AZ ATI/JV.
SQ's biggest mistake was the terms and conditions attached to their 49% stake. Sir Richard Branson owns 51% via his offshore trusts and as his stake is larger than SQ's he gets to do what he wants when he wants and how he wants. All that the 49% stake gives is 49% of any profits that are earnt.
This is what makes the 49% stake unattractive to SQ and potentially unattractive to anyone else. The best that can be said of it is that it might provide a regular income stream. I'm sure however that if DL is as well managed as its executives consider it is they can find far better things to do with the money.
usdcaguy From United States of America, joined Jan 2004, 1087 posts, RR: 2
Reply 10, posted (2 years 4 months 2 weeks 6 days 3 hours ago) and read 38153 times:
I think the idea of a DL/AF/KL acquiring VS is fascinating, but DL/AF/KL/AZ/VS should determine their chances of getting approval for a JV before making an investment. I don't see any value in the partnership otherwise. Such an acquisition would be huge for DL given its current debt and pension obligations; it cannot afford to make a mistake. Given this, I question whether adding the VS flights to the scope of the JV would really enable it go against AA and BA at JFK. It would look good, yes, but in my mind, the VS brand seems to have lost a bit of its shine over the past decade and does not seem to be as popular with corporate customers. In that case, I'm not sure adding VS to the scope of the DL/AF/KL/AZ JV would necessarily add much in terms of market share or leverage. I would hope DL/AF/KL would seriously crunch the numbers on this one and weigh the risks before making a decision.
I did notice that The Times named Delta "Americas largest airline". Interesting. I thought that moniker was supposed to belong to United.
Well, there are multiple ways an airline could be the world's largest. For example, DL still carry's more passengers than UA does, they also have a larger fleet. But UA has more passenger-kilometer's flown.
It is very hard to say who is the world's largest airline, there are multiple different ways that could be twisted.
ORDBOSEWR From United States of America, joined Jun 2011, 487 posts, RR: 0
Reply 15, posted (2 years 4 months 2 weeks 5 days 23 hours ago) and read 34475 times:
Quoting rwy04lga (Reply 12): Perhaps he meant after DL 'acquired' (or would that be 'merged with'?  VS.
At the moment, UA is larger than DL.
I am not sure this is technically possible given all of the rules associated to ownership.
If VS would become a US based airline then it would be subject to all of the US bi-laterals and frankly that would kill VS.
It is more likely that DL would get the 49% and then AF-KL would get a few more % giving the alliance the ability to make all decisions, but VS would remain a EU based airline.
My big question is how does this really help DL? (besides the fact of keeping VS out of *A, which would be big for LHR fliers)
Quoting usdcaguy (Reply 10): I did notice that The Times named Delta "Americas largest airline". Interesting. I thought that moniker was supposed to belong to United.
But United isn't just the largest in the US, but the world (based on the most widely recognized metric, but it is argument that is never over)... So it just goes to prove that these reporters are asked to write on subjects they are not experts in.
commavia From United States of America, joined Apr 2005, 12369 posts, RR: 62
Reply 17, posted (2 years 4 months 2 weeks 5 days 23 hours ago) and read 34107 times:
I guess it would make sense for both carriers on some levels, although it seems not to on others.
To start with the obvious, Virgin's pool of LHR slots is - to be sure - quite valuable, and the combination of Delta and Virgin would be a formidable #2 competitor in the U.S.-LHR market (albeit still dramatically far behind AA/BA). Coordinating their networks would allow the two carriers to optimize schedules in overlapping markets - JFK/BOS-LHR - and boost Delta's competitiveness in several important U.S. markets where LHR is a big local market (MIA and LAX). And, of course, Virgin's beyond-LHR connectivity to India/Mid East/Africa, plus soon several domestic and European/Near East markets, wouldn't hurt, either. For Virgin, connectivity from Delta - particularly over JFK - would open up a far larger network in the U.S. than they have ever had access to before, which could only help their strategically critical Atlantic network.
I think the value and logic for Virgin is obvious. On the other hand, though, I do question how much value this would really generate for Delta. I suppose if they are really that eager to get into the LHR market in a big way, buying into it via Virgin would probably be their best (only) option. Nonetheless, I am not sure if putting millions into an airline with a somewhat questionable long-term strategic direction would be such a smart investment. Plus, in terms of connectivity, only a certain portion of Virgin's U.S. network (JFK, BOS, MIA, LAX, possibly MCO and EWR) would be substantially relevant to Delta's network, while the rest of it (ORD, SFO, LAS, IAD, etc.) would be somewhat less relevant to the combined pair. As for connectivity over LHR, Virgin adds absolutely nothing that Delta doesn't already have via Air France and/or KLM - in fact in just about every beyond-LHR market, Air France and/or KLM already offers more and/or better connectivity than Virgin would or could.
Deltalaw From United States of America, joined Oct 2012, 83 posts, RR: 0
Reply 20, posted (2 years 4 months 2 weeks 5 days 22 hours ago) and read 33101 times:
DL has become more aggressive recently with investment in foreign airlines (AM and G3). Those examples are much smaller stakes though...purchasing 49% of VS would be a huge capital outlay. I wonder what percentage of their 600 million SQ plans on trying to get back?
DeltaMD90 From United States of America, joined Apr 2008, 8308 posts, RR: 51
Reply 21, posted (2 years 4 months 2 weeks 5 days 22 hours ago) and read 32840 times:
I'll believe it when I see it (not saying that in a skeptical way, but I know the reality behind most Delta rumors.) I do have a question though, would DL owning 49% and AF/KL owning 2+%, giving them at least 51%, allow them to call most of the shots? How much control would DL/AF/KL have?
There has to be assurances, I don't think DL is going to blow, what, 600mil pounds and just "hope" they'll get in a JV. Plus, what would be the regulatory hurdles, if there are any?
I'm cautious to say this would be very good news. Obviously, DL and partners can't be #1 to LHR with BA dominating the scene, but there is nothing wrong with being a strong (even if distant) #2... LHR is a very coveted market
avek00 From United States of America, joined Oct 2004, 4447 posts, RR: 20
Reply 22, posted (2 years 4 months 2 weeks 5 days 22 hours ago) and read 32668 times:
As US carriers retake their rightful place at the very top of the global commercial aviation hierarchy, expect to see more proposals like this one.
A tie-up with VS makes good sense for Delta. Why? As the AA/BA JV cooperation deepens, and new United leverages its larger size to maximize financial upside on Heathrow flying, Delta is at risk on being an "odd man out" with a subpar number of frequencies and gateways to the number 1 European destination from the United States. The marketplace has increasingly made clear that going forward, victory in chasing the all-important premium traffic will primarily be had by carriers that offer a comprehensive "all in one" solution for flying to/from a given region of the world. Delta offers great service levels to continental Europe, but it stands to lose corporate contracts if it's not more competitive to the UK, and this is a way to get there.
And FWIW, should this tie-up occur, no one should expect either DL or VS to maintain the same patterns of USA-LHR flying that they offer today. I'd expect BOTH carriers to aggressively redeploy various fleet types to expand the number of US cities served from LHR.
FlyCaledonian From United Kingdom, joined Dec 2003, 2133 posts, RR: 3
Reply 23, posted (2 years 4 months 2 weeks 5 days 22 hours ago) and read 32484 times:
For DL and VS this would be a deal that would allow them to link-up and really take the competition to AA/BA (would still be market leader) and UA/AC.
In the core London-NY market the two carriers would be able to offer six flights a day, which gicen BA/AA are effectively running a LHR-JFK shuttle, and UA has a 5xDaily LHR-EWR service would be a key move. It would also strengthen massively SkyTeam in London.
VS/DL would serve BOS, JFK, EWR, IAD, MIA, ORD, DTW, MSP, ATL, SFO, LAX and YVR from LHR, with LAS and MCO from LGW. WHilst LHR would be key to a deal, a JV would help the LGW ops too. I don't think that it was coincidence that the AA/BA ATI deal saw BA go from 5xWeekly to Daily on the LGW-TPA route.
In a wider sense, a DL/VS tie-up would really strengthen SkyTeam in London, which given it's a huge O&D market would be a bit of a coup. AF/KL have the European feed tied up through CDG and AMS, but in terms of point-pount London would be a market that SkyTeam would get a much greater exposure to.
What's the benefit for VS? It would allow it to play the competition card, because with SkyTeam being the weakest alliance in the London market VS could legitimately say that it didn't want to join an alliance, but the way the aviation market is going standing alon e wasn't an option so it plans to join up with SkyTeam to take the fight to BA/AA (and the rest of oneworld) and Star Alliance, which it must be said has a pretty big LHR presence on international (which lets face it, despite the pending VS venture into UK domestic, is still where VS makes it bread and butter).
I do not think the network is the main motivating factor behind this acquisition. Virgin's network is secondary (perhaps even meaningless). The LHR slots is where the real value is in this transaction and is probably the main reason for DL exploring this opportunity.
For example, let's assume the SFO-LHR route is a money loser. The new owners could easily eliminate the route and associated costs (ie. labor, fuel, etc.) to stop the loss. Then they could route all passengers over another hub (which Virgin could not do on their own), while keeping the underlying AND appreciating asset - the LHR slot.
The key to this transaction is whether DL can get the 49% share at a reasonable price.
: Are you saying that the US carriers have some kind of birth right to be at the very top of the global commercial aviation hierarchy? That's what "rig
: What a ridiculous statement. Why is our rightful place at the top of aviation? What gave us that right and what have we done to keep it? Prefect outs
: The Telegraph also has a quite damning article on this saying that talk is that VIR has lost its way and is making losses... http://www.telegraph.co.u
: If DL buys 49% of VA, that doesn't mean that they would make it a US based carrier as per the EU foreign ownership rules, they would have more access
: Even as an American, I think this statement is extremely naive. Even though the US is arguably the largest aviation market in the world, our Legacy c
: Slots at any airport are meaningless unless they are leveraged to build a strong network. VS and DL, acting alone, are both unable to build the compr