Delta and Virgin Atlantic venture gets tentative immunity from antitrust laws

Delta Air Lines and Virgin Atlantic Airways on Friday won tentative US approval for antitrust immunity for their proposed transatlantic joint venture, officials said.

The Department of Transportation said it had recommended approving a request by the two airlines for protection from prosecution over antitrust issues, saying the tie-up would likely increase competition.

The antitrust immunity "would allow the airlines to operate a joint venture on flights between the United States and the United Kingdom," the department said on its website.

"The Department tentatively concluded that the alliance would benefit passengers by providing stronger competition with existing alliances in the US-Europe market and that it would be unlikely to have anticompetitive effects," it said.

The department announced a several-week waiting period for objections.

"If the decision is made final, Delta and Virgin Atlantic would be able to more closely coordinate their operations between North America and the United Kingdom," it said.

In June, US and EU antitrust authorities approved Delta Air Lines's proposed purchase of a 49 percent stake in Virgin Atlantic to build a joint transatlantic service, after determining the deal would not hurt competition.

In December Delta announced it would buy the stake from Singapore Airlines for $360 million, with the Virgin Group retaining its 51 percent share.

The deal will put Delta and Virgin Atlantic into a joint venture which will offer as many as 31 round-trip flights between Britain and the United States, including 23 to or from the key London-Heathrow hub.

Delta and Virgin argued that their tie-up would offer more competition to American Airlines and British Airways, whose own cooperation holds a powerful share of the US Heathrow market.

[Image via Agence France-Presse]