n.b. – This story first appeared in the APEX Editor’s Blog on 11 December 2012
Virgin Atlantic’s goal of finding a better partner has come to fruition. Delta Air Lines has agreed to acquire the 49 per cent stake of Virgin Atlantic currently held by Singapore Airlines. The $360 million deal, which is expected to close in late 2013, will also see the two carriers establish a joint venture on transatlantic routes.
For Virgin Atlantic the move gives the UK carrier access to better feed on the US side of the Atlantic. For Delta it is all about access to more of the highly coveted slots at London’s Heathrow airport.
And somewhere in between sit the passengers. What does this mega-deal mean for them?
In many cases a joint venture is good news for travellers, and the Virgin/Delta pairing appears to be no exception.
The two carriers have already indicated there will be reciprocity of frequent flyer benefits. This should include points earning and redemption, lounge access and priority ground handling, among other things. For Delta passengers the lounge access in particular should be a nice upgrade; Virgin Atlantic’s Clubhouses are some of the best business-class lounge facilities in the world.
While neither the Delta SkyMiles programme nor the Virgin Atlantic Flying Club programme are the most generous loyalty schemes today, both have certain benefits which should be of value to the combined customer base.
Details are scarce right now but there is plenty of potential for overlap with the two loyalty programmes, and these should work to customers’ benefit. Of course, there will also be plenty of opportunities for things to not work so well. Upgrades across the pond, for example, apply differently between the two because of Virgin’s Premium Economy product, an offering Delta does not have today (Delta offers an extra legroom Economy Comfort product).
Once on board passengers should have, for the most part, a relatively consistent in-flight experience. There are certainly differences between Virgin and Delta; the lack of an on-board bar in business class on Delta flights is an obvious one.
Still, there are plenty of similarities, too. Virgin Atlantic was an early adopter of audio/video on demand (AVOD) for in-flight entertainment in all classes of service. For its flights to Heathrow Delta has a comparable product. Both carriers are IFE customers of Panasonic Avionics.
Similarly, Virgin Atlantic led the crowd in offering fully flatbed seats in its business-class cabin. Both carriers today offer flat beds with direct aisle access for all business-class passengers on all Heathrow flights.
Virgin recently adopted AeroMobile-provided inflight mobile connectivity for its Airbus A330s. Delta, on the other hand, has fitted its mainline fleet – and a sizeable portion of regional jets – with Gogo’s air-to-ground (ATG)-based inflight W-Fi solution, and is poised to launch Gogo’s Ku-band satellite-supported connectivity on long-haul flights.
What will become of Premium Economy, one of the more significant differences between the two carriers? Only time will tell. But it’s clear that Premium Economy isn’t for everybody.
Turkish Airlines is scrapping its offering after finding minimal paid demand while Lufthansa is adding the service, noting that it fills a niche between the ever improving business-class cabin and relatively staid economy-class options. Again, Delta offers Economy Comfort with extra legroom but nothing approaching a true Premium Economy product. Yet.
Ultimately the Virgin/Delta deal means more convenient access between Heathrow and North America for many more passengers. Their schedule will still significantly trail American Airlines and British Airways in combined service but it represents a solid second place position, with the opportunity to feed at both ends.
More options are usually a good thing for customers. Hopefully that is the case here as well.
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