Delta Eyes Virgin's Atlantic Routes
More reasons for Delta Air Line Inc.'s (NYSE: DAL) interest in an investment in Virgin Atlantic emerged today. The huge U.S. carrier finds itself without good market share in routes across the Atlantic. Virgin's passenger base is small, however. That begs the question of how little the investment might be worth. According to Bloomberg:
North Atlantic flights generate roughly a quarter of all global revenue from first- and business-class fares, more than twice as much as the second-place Pacific routes, according to the International Air Transport Association. Heathrow is closer to London than Delta's previous base at Gatwick airport, which U.S. airlines have shunned since flight rules eased in 2008.
"Delta doesn't have that many flights to Heathrow, and Virgin would get more access" to airports in New York and Los Angeles via Delta, said Jeff Straebler, an analyst with John Hancock Financial Services in Boston. "In terms of having a presence at Heathrow, it's the only way for Delta."
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Airlines Tagged: DAL