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The Delta Airlines $360 million deal to buy a 49 percent stake in Virgin Atlantic, allowing it to compete better with U.S. rivals, is about to come to fruition, after two regulatory clearances announced today. The first one comes from European Commission, which said: “The Commission’s investigation confirmed that in all markets the combined entity would continue to face competition from several strong competitors, notably British Airways and American Airlines.”
“On each of the transatlantic routes where both Virgin and Delta operate, sufficiently strong players – in particular British Airways and American Airlines, which joined forces in a joint venture – are present and capable of exercising a significant competitive constraint on the combined entity. Moreover, Delta and Virgin are currently not particularly close competitors, but primarily compete against British Airways and American Airlines.”
The second one comes from the Justice Department’s Antitrust Division in U.S., which said in its clearance notice: “After a thorough investigation of the competitive effects of the proposed equity investment and joint venture, the Antitrust Division concluded that the facts and circumstances did not warrant further investigation or action.”
The deal still pending with U.S. Department of Transportation, seeking antitrust immunity for their joint venture.