Delta Air Lines and Virgin Atlantic yesterday filed their long-awaited application for antitrust immunity with the U.S. Transportation Department, simultaneously laying out the details of how they want to work with each other and coordinate with Delta’s other immunized joint venture with Air France, KLM and Alitalia.
“Delta can maximize the service and public benefits of the two joint ventures by relying primarily on the Delta/Virgin Atlantic joint venture to serve North America-U.K. traffic, and continuing to rely on the Delta/Air France/KLM/Alitalia joint venture to serve continental Europe and flow markets beyond the European hub gateways,” the carriers say in the filing.
Delta and Virgin Atlantic want immunity for a joint venture on North America-U.K. routes, which they maintain will create a necessary and beneficial counterweight to the American Airlines/British Airways immunized alliance that dominates the market. The immunity will let them share their profit on the operations, and coordinate pricing, scheduling, sales and marketing.
The immunity would not only bolster their ability to compete against American’s service to London Heathrow from New York and Boston, they say, but also enable them to add new service from Seattle. Delta says a second daily flight from its Detroit hub would be a high priority, and Salt Lake City service would be considered.
There are no plans, however, for Delta to code-share on Virgin Atlantic’s long-haul services to points east and south of London. Those connections would not compare favorable with Delta’s own direct or nonstop services, or connecting options via Amsterdam, Paris or Rome, they say. Instead, the carriers will focus their joint venture on North America-U.K. traffic flows.
The carriers, however, also are asking the DOT for immunity to coordinate with Delta’s transatlantic joint venture with Air France, KLM and Alitalia.
This would enable the joint ventures to coordinate activities in the U.S.-U.K. markets. But it also would allow all five carriers to work together on corporate and agency sales programs, the setting of ancillary fees, and on joint purchasing opportunities, such as ground-handling services and distribution agreements.
In addition, because Virgin Atlantic has a very limited intra-U.K. network, coordination with Air France/KLM will enhance the ability of both joint ventures to compete for transatlantic passengers in U.K. regional markets served via Paris and Amsterdam, the airlines say.
“Virgin Atlantic does not have and cannot develop London Heathrow as a hub to offer comprehensive coverage of U.K. regional cities,” the application states. “Coordination with Air France and KLM would help to alleviate this problem. Air France and KLM serve 13 U.K. regional cities with 70 daily flights from Amsterdam and Charles de Gaulle Airport.”