This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: Delta Submits Virgin Atlantic Bid to EU Regulators

Stocks in this article: DAL

NEW YORK ( TheDeal) -- Delta Air Lines (DAL) has filed with European antitrust regulators seeking approval for its deal to acquire a 49% stake in Virgin Atlantic Airways, keeping the airline on schedule to close the $360 million deal before year's end.

Atlanta-based Delta in December agreed to acquire the stake from Singapore Airlines Ltd. as part of a broader alliance with Virgin Atlantic that will also include a request for antitrust immunity to coordinate trans-Atlantic schedules. Delta is making the investment to increase its access to London's Heathrow Airport, a highly congested airport seen as a key to winning lucrative business fliers.

Virgin Atlantic is 51% owned by entrepreneur Richard Branson, who intends to hold onto his stake post-deal.

Delta and Virgin filed their request for antitrust immunity in the U.S. last month, and according to the European Commission Web site will learn by June 20 whether their application will be approved in Brussels. The airlines have argued that their alliance would be good for competition because it would allow both companies to better compete against a joint venture of American Airlines Inc. and British Airways plc that they say controls nearly 60% of Heathrow's slots.

Separately, Virgin Atlantic on Thursday, May 16, disclosed a fiscal full-year loss of 69.9 million UK Pounds ($107 million) on sales of 2.87 billion UK Pounds, due to higher costs and a decline in business travel during the Olympics. The loss comes at a time when most of the Western world's airlines are reporting record profits, and underscores the need for an overhaul of Virgin Atlantic's business model.

Virgin Atlantic in February hired former American Airlines exec Craig Kreeger as CEO, and has begun a restructuring campaign that includes trimming costs, moving to more fuel-efficient jets and starting domestic service in the United Kingdom. The company also is banking on increased traffic thanks to its relationship with Delta, which can connect Virgin Atlantic passengers throughout North America and through its Skyteam international alliance can connect business travelers to locations around the world.

Kreeger said in a statement Thursday that he is committed to returning the airline to profitability in the years to come.

"Last year saw a double-dip recession, a continued weak macroeconomy, and an Olympic Games which, although a fantastic event, severely dented demand for business travel," Kreeger said. "I am confident we have concrete plans in place to take Virgin Atlantic forward and return the business to profitability within a two-year time frame."

Written by Lou Whiteman in New York

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs