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Delta Air eyes bigger slice of NY-London travel

Published on NewsOK Modified: December 3, 2012 at 4:15 pm •  Published: December 3, 2012

A Delta purchase of Virgin Atlantic would be its biggest deal since buying Northwest Airlines in 2008. That move, too, was aimed partially at giving Delta a bigger route network, since Northwest had extensive flying rights in Asia. More recently, Delta has made investments in Grupo Aeromexico and Brazil's GOL Linhas Aereas Inteligentes SA.

Virgin Atlantic was founded in 1984, and 51 percent is owned by Sir Richard Branson's Virgin Group. Singapore Airlines bought its stake from Branson in early 2000 for 600.3 million British pounds.

Virgin Atlantic has struggled with losses and said in 2010 that it might be interested in some kind of tie-up with another airline. British media reports at that time said that Delta was interested.

Delta is expected to post its third annual profit in a row this year. It's untroubled by merger woes like United parent United Continental Holdings Inc., or by bankruptcy like American. It's been able to focus on improving its network — and on cutting its fuel bill, going so far as to buy a refinery earlier this year.

Vicki Bryan, a debt analyst for Gimme Credit, wrote that Delta is disciplined enough not to overpay for a piece of Virgin Atlantic and has the strongest bargaining position "versus Singapore which wants to sell and Virgin which plainly needs significant help."

Shares of Atlanta-based Delta Air Lines Inc. fell 38 cents, or 3.8 percent, to close at $9.62, the biggest decline among the airlines on a down day for stocks. .