Delta Air Lines and European partner Air France-KLM are reportedly considering options for a possible deal with Virgin Atlantic, which could gain Delta a bigger presence at the crucial London Heathrow Airport.
Delta and Air France-KLM, founding partners in the SkyTeam alliance, have enlisted investment banking firm Goldman Sachs to advise them on a potential approach with Virgin Atlantic, according to The Daily Telegraph in the U.K.
Reports last December said Virgin Atlantic had been seeking potential partners or an investment, with Delta as a possible candidate, but added that there was no formal process in progress with anyone. Virgin Atlantic is 51 percent owned by Richard Branson's Virgin Group. The remaining 49 percent of the company is owned by Singapore Airlines.
Singapore is a member of United Airlines' Star Alliance global airline network.
Delta's chief executive, Richard Anderson, said in December said he wants to prepare the company to be able participate in further consolidation expected in the airline industry, whether through joint ventures or other arrangements.
On Monday, Delta said that "as a matter of policy, we do not comment on industry rumors or speculation about potential airline partnerships." Goldman Sachs declined to comment.
London Heathrow is a major hub for lucrative business travel and Delta has focused on increasing its service to Heathrow in recent years, but available slots at the airport are limited.
A deal with Virgin Atlantic "could fill a big hole in [Delta's] SkyTeam trans-Atlantic alliance," said Mo Garfinkle, chief executive of GCW Consulting. "This is an extremely shrewd move by a shrewd management team at Delta... It could be the harbinger of global consolidation."
